MEETING AGENDA. MRO Board of Directors. March 17, :00 a.m. 2:30 p.m. RIVERSIDE ROOM. Hilton MSP Airport Hotel Bloomington, MN

Transcription

1 MEETING AGENDA MRO Board of Directors March 17, :00 a.m. 2:30 p.m. RIVERSIDE ROOM 380 St. Peter Street #800 Saint Paul, MN P F W. MidwestReliability.org Hilton MSP Airport Hotel Bloomington, MN CLARITY ASSURANCE RESULTS CLARITY ASSURANCE RESULTS

2 NOTICE REQUIREMENTS - MRO 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 2015 by posting the 2016 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 February 17, 2016, 30 days prior to the scheduled meeting, and was published on the MRO website at: CLARITY ASSURANCE RESULTS 2 of 84

3 VIDEO AND AUDIO RECORDING - MRO 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. 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. CLARITY ASSURANCE RESULTS 3 of 84

4 MEETING AGENDA - MRO Board of Directors Meeting MEETING AGENDA MRO Board of Directors Meeting Thursday, March 17, :00 a.m. to 2:30 p.m. Central Hilton MSP Airport Hotel, Bloomington, MN AGENDA ITEM BOARD ACTION TIME 1 Call to Order and Introductions Richard Doying, 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 President s Report Dan Skaar, President and CEO 4 Chair s Remarks Richard Doying, Board Chair 5 NERC s Essential Reliability Services Framework Report John Moura, NERC Director Reliability Assessment and System Analysis and Pooja Shah, NERC Senior Engineer 6 NERC Policy Matters a. Briefing on NERC Board of Trustees and Member Representative Committee Meetings, Sarasota, FL Richard Doying, Chair, and Dan Skaar, President and CEO b. CIP V5 Transition Guidance and Education Richard Burt, Vice President of Risk Assessment, Mitigation and Standards 7 Consent Agenda a. Review and Approve Minutes from December 10 Annual Member and Board Meeting and Annual Board-Only Meeting b. Review and Approve New Working Group Appointments 8 MRO Operations Report Dan Schoenecker, Vice President Operations a. Event Analysis Report Information Discussion Discussion Discussion Information and Discussion Action Items 8:00 a.m. 8:05 a.m. 8:25 a.m. 8:45 a.m. 9:20 a.m. 9:55 a.m. *** BREAK *** 10:00 a.m. Information and Discussion 10:20 a.m. CLARITY ASSURANCE RESULTS 4 of 84

5 MEETING AGENDA - MRO Board of Directors Meeting 9 Standing Committee Reports a. MRO Operating Committee Report - Dean Schiro, Chair Update on Committee s Work on Misoperations Mark Gutzmann, Protective Relay Subcommittee Member NERC Operating Committee (OC) Report Dick Pursley b. MRO Planning Committee Report - Gayle Nansel, Chair NERC Planning Committee (PC) Report - Dale Burmester c. MRO Standards Committee Report - Robert Thompson, Chair NERC Critical Infrastructure Protection Committee - Mike Kraft NERC Standards Committee Report - Andrew Pusztai d. MRO Compliance Committee Report Mahmood Safi, Chair NERC Compliance and Certification Committee Terry Bilke Information and Action Items 10:40 a.m. *** LUNCH BREAK *** 12:00 p.m. 10 Independent Auditor Report Nicki Donlon, Partner, Baker Tilly a. Accept 2015 Audit Report of Financial Statements Action Item 1:15 p.m. 11 Board and Committee Reports a. Hearing Body Report Ray Wahle, Chair b. Finance and Audit Committee Report Silvia Parada Mitchell, Chair c. Governance and Personnel Committee Report Ken Goldsmith, Chair d. Dispute Resolution Committee Report Gordon Pietsch, Chair 12 External Affairs Report Miggie Cramblit, Vice President General Counsel Corporate Secretary and Director External Affairs Information and Action Items Information and Discussion 13 Other Business Information 1:45 p.m. 2:15 p.m. 14 Adjourn 2:30 p.m. CLARITY ASSURANCE RESULTS 5 of 84

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. CLARITY ASSURANCE RESULTS 6 of 84

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 2015 Board of Directors Roster Name Sector Company Term Richard Doying Transmission System Chair Operator Midcontinent ISO December 2018 Silvia Parada Generator and/or Power Mitchell Marketer Vice Chair NextEra Energy December 2018 Bob Harris Brad Cox Federal Power Marketing Agency Generator and/or Power Marketer Western Area Power Administration December 2018 Tenaska Power Services Co. December 2016 Chris Fleege Investor Owned Utility Minnesota Power December 2017 Doug Johnson Transmission System Operator American Transmission Company December 2017 Dr. Massoud Amin Independent Director University of Minnesota December 2018 Gordon Pietsch Cooperative Great River Energy December 2018 Iqbal Dhami Canadian Utility Saskatchewan Power December 2017 Jeffrey Gust Investor Owned Utility MidAmerican Energy Company December 2016 JoAnn Thompson Investor Owned Utility Otter Tail Power Company December 2016 Ken Goldsmith Investor Owned Utility Alliant Energy December 2016 Larry Koshire Municipal Utility Sector Rochester Public Utilities December 2017 Micheline Casey Independent Director Former Chief Data Officer, Federal Agency December 2017 Mike Risan Cooperative Basin Electric Power Cooperative December 2016 Ray Wahle Municipal Utility Sector Missouri River Energy Services December 2016 Teresa Mogensen Investor Owned Utility Xcel Energy December 2017 Thomas Vitez Transmission System Operator ITC Holdings December 2017 Tony Clark Canadian Utility Manitoba Hydro December 2018 CLARITY ASSURANCE RESULTS 7 of 84

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. CLARITY ASSURANCE RESULTS 8 of 84

9 AGENDA 3 - President s Report AGENDA 3 President s Report Daniel Skaar, President and CEO President and CEO Dan Skaar will provide an oral report at the meeting. CLARITY ASSURANCE RESULTS 9 of 84

10 AGENDA 4 - Chair s Remarks AGENDA 4 Chair s Remarks Richard Doying, Board Chair Chair Doying will provide an oral report at the meeting. CLARITY ASSURANCE RESULTS 10 of 84

11 AGENDA 5 - NERC Essential Reliability Services Framework Report AGENDA 5 NERC Essential Reliability Services Framework Report John Moura, NERC Director Reliability Assessment and System Analysis, and Pooja Shah, NERC Senior Engineer John Moura NERC Director Reliability Assessment and System Analysis John Moura is the Director of Reliability Assessment and System Analysis for the North American Electric Reliability Corporation (NERC), which he joined in John leads the electric reliability organization s efforts to independently assess and report on the overall reliability, adequacy, and associated risks of the interconnected North American bulk power system. John leads the development of NERC s annual long-term and seasonal reliability assessments, as well as NERC s efforts for evaluating reliability impacts as a result of potential environmental regulations, accommodating high-levels of variable generation, and an increasing dependence on natural gas. He is the co-author of numerous NERC special reports and several IEEE publications John coordinates the efforts of NERC s Planning Committee and several other stakeholder groups, which brings together the power industry s leading experts on resource and transmission planning. In addition, John is actively engaged in multiple groups and committees across North America focused on the power system risk and vulnerability analyses, loss of load studies, probabilistic resource adequacy modeling, and interconnection-wide power system modeling. John earned his bachelor degree from Rutgers University. Pooja Shah NERC Senior Engineer Pooja Shah is a Senior Engineer with the Reliability Assessment Group at North American Electric Reliability Corporation (NERC). She successfully led NERC s Essential Reliability Services Task Force (ERSTF), and continues to lead the efforts for Essential Reliability Services Working Group (ERSWG) and Distributed Energy Resources Task Force (DERTF). She also leads NERC s seasonal assessments and supports other long term reliability projects, cross functional teams and special assessment projects. In her current position, Pooja leads the ERSWG and DERTF activities that focus on sustaining the essential services needed to maintain bulk power system reliability in the face of retiring base load generating plants and integration of variable energy resources. Prior, Pooja worked as a Senior Reliability Risk Assurance Engineer with a bulk power system awareness group where she managed reliability risk assurance projects. Pooja is also the winner of 2015 Atlanta IEEE PES Young Engineer of the Year award. Before NERC, Pooja worked as a Senior Engineer for Public Service of New Hampshire, Northeast Utilities. She has extensive experience in Distribution and Transmission operations, and planning. She handled projects that addressed southern New Hampshire load growth, by construction of new substations, distribution lines and distributed generation projects. She also CLARITY ASSURANCE RESULTS 11 of 84

12 AGENDA 5 - NERC Essential Reliability Services Framework Report worked with other departments on projects for proposed wind farms on distribution systems, and special planning projects. She successfully conducted System Loss Studies for two years which incorporated losses on the New Hampshire system from transmission to customer meter. In the operations arena, she was responsible for modeling, and maintaining the state estimator for New Hampshire system. Pooja volunteers for STEM-related workshops and conferences in her spare time on a regular basis. At NERC, she leads the effort to support Atlanta Science Festival by participating in their annual expo encouraging students to develop an interest in STEM. She referees GA state FIRST Robotics competition, volunteered at IEEE-WIE Girls Scout event, and assisted the IEEE-women in engineering efforts. In the past, she was an active participant with Expanding Your Horizons organization that brought hands on learning experience for girls in middle and high school grades. She received her Bachelor of Science in Electrical Engineering from University of New Hampshire, and Master of Science in Electrical Engineering from Worcester Polytechnic Institute. Pooja also holds Graduate Certificate in Power Systems Management from Worcester Polytechnic Institute. CLARITY ASSURANCE RESULTS 12 of 84

13 AGENDA 6 - NERC Policy Matters Date: March 3, 2016 AGENDA 6 NERC Policy Matters a. Briefing on NERC Board and Member Meetings, Sarasota, Florida Richard Doying, Chair, and Dan Skaar, President and CEO To: From: Subject: Action: MRO Board of Directors Chair Richard Doying and President and CEO Dan Skaar Briefing on NERC Board and Member Meetings, Sarasota, Florida None - Information and Discussion Dear Board Members: We will provide an oral report on the following NERC meetings that took place in February in Sarasota, Florida. NERC Member Representatives Committee Meeting 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. CLARITY ASSURANCE RESULTS 13 of 84

14 Agenda Member Representatives Committee February 10, :00 5:00 p.m. Eastern Hyatt Regency Sarasota 1000 Boulevard of the Arts Sarasota, FL Introduction and Chair s Remarks NERC Antitrust Compliance Guidelines and Public Announcement* Consent Agenda 1. Minutes* - Approve a. November 4, 2015 Meeting b. January 12, 2016 Conference Call 2. Future Meetings* Regular Agenda 3. Election, NERC Board of Trustees* - Elect 4. DOE-NERC Coordination 5. Responses to the Board s Request for Policy Input* a Business Plan and Budget Development* b. ERO Enterprise Strategic Planning Redesign* c. Cost Effectiveness Method and Pilot Proposal* 6. Additional Policy Discussion of Key Items from Board Committee Meetings* a. Standards Oversight and Technology Committee (February 2, 2016) i. ERO Enterprise IT Application Strategy ii. Reliability Standards Quarterly Status Report b. Finance and Audit Committee (February 4, 2016) i Year-End Unaudited Statement of Activities for NERC and the Regional Entities c. Corporate Governance and Human Resources Committee i Year-End Performance Report 14 of 84

15 ii. Board and Board Committees Self-Assessments and MRC Assessment of Board of Trustees Effectiveness Results d. Compliance Committee i. Overview of Critical Infrastructure Protection Activities ii. CMEP Annual Report 7. Supply Chain Management Technical Conference* 8. BES Notification and Exception Process Update* 9. Clean Power Plan: NERC Assessments Status Update* 10. Outreach and Follow-up of Reliability Assessment Reports* a. Essential Reliability Services Task Force Report and Abstract b. Clean Power Plan Report 11. Compliance Guidance Implementation* 12. Regulatory Update* *Background materials included. Agenda Member Representatives Committee February 10, of 84 2

16 Agenda Board of Trustees February 11, :30 a.m. 12:00 p.m. Eastern Hyatt Regency Sarasota 1000 Boulevard of the Arts Sarasota, FL Call to Order NERC Antitrust Compliance Guidelines Public Announcement Consent Agenda - Approve 1. Minutes* a. January 20, 2016 Conference Call b. December 7, 2015 Conference Call c. November 5, 2015 Meeting 2. Committee Membership and Charter Changes* a. Compliance and Certification Committee Membership b. Planning Committee Membership c. Critical Infrastructure Protection Committee Membership d. Election and Appointment of NERC Officers Regular Agenda 3. Remarks and Reports a. Opening Remarks by Board Chair b. Remarks by David Ortiz, U.S. Department of Energy c. Remarks by Murray Doehler, CAMPUT d. Report on Mexico s Electricity Reforms, Commissioner Marcelino Madrigal, CRE e. President s Report f. Board of Trustees Self-Assessment Results 4. Standards* a. Project Phase 2 of Balancing Authority Reliability-based Controls (BAL-005, BAL-006, FAC-001) Adopt b. Project Vegetation Management (FAC-003) Adopt 16 of 84

17 c. Midwest Reliability Organization Regional Reliability Standard Processes Manual Revisions Approve d. TOP-007-WECC-1a System Operating Limits Retire 5. Other Matters and Reports a. Rules of Procedure Revisions to Comply with Federal Energy Regulatory Commission Directives Approve b. Outreach and Follow-up of Reliability Assessment Reports Update i. Essential Reliability Services Task Force Report and Abstract ii. Clean Power Plan Report c. E-ISAC Quarterly Update Information i. CRISP Update d. Report on GridExIII Information 6. Committee Reports* a. Operating Committee b. Planning Committee c. Critical Infrastructure Protection Committee d. Member Representatives Committee e. Personnel Certification Governance Committee f. Standards Committee g. Reliability Issues Steering Committee h. Compliance and Certification Committee i. Electricity Sub-Sector Coordinating Council 7. Forum and Group Reports* a. North American Energy Standards Board b. Regional Entity Management Group c. North American Transmission Forum d. North American Generator Forum 8. Board Committee Reports a. Corporate Governance and Human Resources i Board Committee Assignments Approve ii Contribution to Savings and Investment Plan Approve iii. Mandates: Standards Oversight and Technology, Finance and Audit, and Enterprise-wide Risk Committees Approve Agenda Board of Trustees February 11, of 84

18 b. Compliance c. Finance and Audit i. Fourth Quarter 2015 Unaudited Statement of Activities Accept d. Enterprise-wide Risk e. Standards Oversight and Technology 9. Adjournment *Background materials included. Agenda Board of Trustees February 11, of 84

19 AGENDA 6 - NERC Policy Matters AGENDA 6 NERC Policy Matters b. CIP Version 5 Transition Guidance and Education Richard Burt, Vice President of Risk Assessment, Mitigation, and Standards Date: March 3, 2016 To: From: Subject: Action: MRO Board of Directors Richard Burt, Vice President of Risk Assessment, Mitigation, and Standards CIP Version 5 Transition Guidance and Education None - Information and Discussion Dear Board Members: On January 21, 2016, FERC approved Order 822, which adopted CIP Version 5 Revisions to seven CIP Reliability Standards. The Reliability Standards approved include: CIP Security Management Controls CIP Personnel and Training CIP Physical Security of BES Cyber Systems CIP Systems Security Management CIP Recovery Plans for BES Cyber Systems CIP Configuration Change Management and Vulnerability Assessments CIP Information Protection The revisions under CIP Version 5 eliminated the identify, assess, and correct language, the enhanced security controls for Low Impact assets, new controls for transient devices used in support of Medium and High Impact assets, and improved protections for communication networks. In addition to the CIP Version 5 Revisions, FERC directed NERC to conduct a study to assess the controls pertaining to remote access found in requirements of the CIP Reliability Standards and assess that remote threats and vulnerabilities are properly addressed. Order 822 also directed NERC to improve controls related to transient electronic devices for Low- Impact BES Cyber Systems, develop further protections for communication links between Control Centers, and further refine the definition of Low Impact External Routable Connectivity (LERC). Efforts to revise the standards will not be resumed until after April 1, of 84

20 AGENDA 6 - NERC Policy Matters While the effective dates for the newly approved CIP Version 5 Revisions vary, the majority of the revised requirements become effective on July 1, A consortium of organizations filed a motion with FERC, requesting an extension of the CIP Version 5 implementation date until July 1, 2016; FERC granted the request on February 25, MRO staff will work with NERC to make appropriate adjustments to compliance monitoring activities planned for Q2, including scheduled Compliance Audits and a planned Self-Certification for CIP During the CIP Version 5 Transition Study, one of the issues identified relates to the impact rating for Transmission Owner (TO) Control Centers that have operational control over BES Assets despite not being registered as Transmission Operators (TOPs). According to the CIP Impact Rating criteria, these TO Control Centers must be considered Medium Impact and their associated BES Cyber Systems must be protected accordingly. However, many of the TOs in question present minimal risk to the BES due to the nature of the facilities over which they have control. A revision of the standard, namely refinement of the impact rating criteria, is necessary to address this issue in the long term. In the meantime, NERC and the Regions have made the determination, after consultation with FERC, to exercise risk-based discretion and allow certain TO control centers to be deemed Low Impact. Each TO in the MRO Region, which is not also registered as a TOP, received a letter on February 15, 2016, clarifying the expected impact rating of any control center they may have. Due to MRO s practice of registering entities that operate substantial transmission as TOPs, the only MRO TOs that are expected to have Medium Impact control centers are two entities that operate enough generation (as a GOP) to meet the CIP-002 threshold for generation control. There are no MRO TOs that are not registered as TOPs that will have Medium Impact control centers due to their control of BES transmission. 20 of 84

21 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda a. Review and Approve Minutes from December 10, 2015 Annual Member and Board of Directors 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 December 10, :00 a.m. to 2:10 p.m. Central 1. Call to Order and Introductions MRO Board Chair, Teresa Mogensen, called the meeting to order at 8:00 a.m. and introductions were made. Iqbal Dhami, Bob Harris and Mike Risan joined the meeting by conference call. 2. Determination of Quorum, Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, MRO Vice President General Counsel, Corporate Secretary and Director of External Affairs determined 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, Cramblit reviewed MRO s Standards of Conduct, Conflict of Interest and Anti-Trust Guidelines with the board. 3. President s Report President and CEO Dan Skaar extended a warm welcome to the annual meeting of the members and board of directors and introduced meeting guest speakers: Charlie Berardesco, NERC Senior Vice President and General Counsel and Corporate Secretary, Sonia Mendonca, NERC Vice President Enforcement and Deputy General Counsel, and Scott Henry, President and CEO of SERC. Skaar informed the board that regrettably Paul Barber, Trustee on the NERC Board, was unable to attend the meeting. Skaar opened his report by thanking the board, committee members and staff for their hard work on another successful year. He stated that MRO s staff is highly engaged with the right motivation and the right mission. Employee engagement is important because it directly affects stakeholder satisfaction, Skaar said. Highly engaged employees deliver superior results. Skaar also reviewed the important efforts undertaken by MRO staff and stakeholder committees in 2015 to further MRO s Strategic Objectives, and noted that staff will continue its outreach efforts in 2016 as we provide clarity on the requirements and work to simplify regulation. He also noted that the organization will face a number of challenges in 2016 with the implementation of the new CIP Standards, preparing for the Clean Power 21 of 84

22 AGENDA 7 - Consent Agenda Plan, and reshaping regulation to be more responsive and meaningful to its constituencies. He closed by thanking Teresa Mogensen for her leadership as chair over the past two years, and stated he looked forward to working with current Vice Chair Richard Doying upon his election to chair. President Skaar s report is included as Exhibit B. 4. Chair s Remarks Chair Mogensen welcomed attendees to the final meeting of the board of directors and her last meeting as board chair. She reflected on her term and thanked her director colleagues for entrusting her with the position of chair. She also thanked Dan Skaar and MRO staff for their hard work in 2015 carrying out MRO s mission, stating you truly exemplify a high reliability organization, and I was proud to represent MRO at NERC and elsewhere. Mogensen also thanked MRO registered entities for taking their obligations seriously and striving to achieve reliability excellence. Together, Mogensen said we are making a difference in our communities and to those we serve. She reviewed the 2015 Strategic Objectives that were accomplished, and stated that our efforts in 2016 will be built upon this work. She provided her insights on the challenges we will face in 2016 and beyond, noting that the evolution of energy policy and the transforming resource mix will be on the forefront. Mogensen explained that the foundation of reliability is a robust electrical grid that provides options, thereby diminishing the criticality of any single set of assets, and that we must work together to educate policy makers and the public about the importance of the grid and making investments to it. Mogensen also added that as the electric system evolves, it will be equally important to pay attention to the systems that support it. Chair Mogensen s remarks are attached as Exhibit C. 5. NERC Trustee Remarks Paul Barber was not able to attend this meeting. 6. NERC Staff Remarks Charlie Berardesco, Senior Vice President and General Counsel NERC, thanked the MRO Board for the invitation to attend the meeting and MRO staff for its support and leadership. He reflected on the objectives of the ERO enterprises when he began his work at NERC over three years ago, and the tremendous amount of progress that has been made since. He stated that the relationships between the Regions, NERC and FERC have greatly improved and foster the collaborative efforts required to implement risk-based compliance monitoring and enforcement. Berardesco asked the board and meeting attendees to consider what it means to an industry that is operating under economic strain with a changing business model, increased expectations of reliability, and changing threats all happening in a very active regulatory climate. He stated that we have matured as an ERO Enterprise and now have a compliance and enforcement program that is more efficient and a grid that is more reliable. For 2016, Berardesco stated that we need to continue to focus on modernizing the standards in a thoughtful and measured way, be proactive about the changing resource mix and its effect on reliability, fully and consistently implement riskbased programs across the ERO enterprise, and look for efficiencies in how we conduct our work. Finally, he emphasized the importance of engagement with industry and the need to speak as one voice to ensure policy makers see the results of our work. Berardesco responded to questions from the board. 22 of 84

23 AGENDA 7 - Consent Agenda Dr. Amin joined the meeting at 8:18 a.m Enforcement Highlights and a Preview of 2016 Sonia Mendonca, Vice President of Enforcement and Deputy General Counsel, thanked the board and MRO staff for the opportunity to attend the meeting and recognized Sara Patrick for her leadership in developing and implementing risk-based enforcement processes. She described the ERO s risk-based approach to enforcement and stated that this work has made the Regions and NERC more closely aligned. Mendonca provided information on self-logging and encouraged MRO registered entities to participate in this program. She also described compliance exceptions and stated that 50 percent of the instances of noncompliance with NERC Reliability Standards in 2015 were processed as compliance exceptions. She reflected on how these streamlined processes have allowed the ERO to gain efficiencies and eliminate the backlog. Mendonca reviewed other areas of focus for the ERO enforcement group, and discussed challenges that will need to be addressed for the continued success of the program. She closed by stating that she looks forward to the ongoing work and responded to questions. 8. Regional Perspectives Scott Henry, President and CEO SERC Reliability Corporation, described the work the Regional Entity Management Group (REMG) is doing as it focuses on continuous improvement. He reviewed the REMG s objectives, which have resulted in increased collaboration and trust, and a common vision of reliable operations. Henry provided an example where the Regions agreed to employ an independent third party consultant to assess the Regions audit practices. He noted that the effort was led by Dan Skaar, and resulted in two recommendations to implement a shared auditor checklist and auditor handbook. He stated that the Regions will continue to assess ways to be more efficient and implement common tools in Henry also reviewed the top regional reliability risks that SERC is facing, such as security of critical infrastructure, the changing resource mix, and relay misoperations. He stated that SERC is continually focused on a regional culture of reliability and ensuring a commitment from operators to be reliable, especially considering changes to the demographics in the region. Henry responded to questions from the board. 9. NERC Reliability Summit Chair Mogensen noted that a written report was included in the agenda packet and stated that staff is available to respond to questions. 10. NERC Policy Matters a. Briefing on NERC Member Representatives Committee and Board of Trustees November Meetings, Atlanta. Chair Mogensen reviewed important agenda topics from NERC s November meetings of the Member Representatives Committee (MRC), Board of Trustees and NERC and Regional Board Chair and Vice Chair Meetings. She provided highlights of the discussions, which included how the regional leadership can foster a single organization culture, matters pertaining to the CIP Version 5 transition and how CIP 14 will be implemented, inherent risk 23 of 84

24 AGENDA 7 - Consent Agenda assessments that will be completed in 2016, and efforts underway to evaluate the effectiveness of the standards in the face of new challenges. President Skaar added that he co-presented with NERC Staff Member Val Agnew, Senior Director of Reliability Assurance, on the proposed guidance policy, which was approved by the NERC board. Board member and member of the NERC MRC, Jeff Gust, noted that more cooperation and collaboration between NERC and the Regional Entities is evident at these meetings. b. Critical Infrastructure Protection (CIP) Version 5 Transition Update. Tom Tierney, Vice President Compliance, drew the board s attention to the report that was provided in the agenda materials. He highlighted that FERC has indicated it will perform audits of the Version 5 Standard on one registered entity in each Region in He stated that while details are still being discussed, Regional Entity staff will participate on these audits and will likely lead the coordination. Tierney also noted the upcoming audit schedule for CIP related to physical security, and briefly described MRO s 2016 implementation plan related to the CIP standards. He responded to questions from the board. c. NERC GridEx III Report. President and CEO Dan Skaar and Steen Fjalstad, MRO Risk Assessment and Mitigation Principal, reported on NERC s third annual grid security exercise, GridEx III. Fjalstad stated that MRO was an active participant in the exercise for the first time this year with nine staff members participating at MRO along with a local FBI agent and Dan Skaar participating in the Executive Tabletop exercise in Washington, D.C. He noted that even though MRO does not operate the grid it would have a role during a large power system event. He reviewed a video with the board and attendees that was played during the exercise and provided a list of the risks that were addressed. Fjalstad offered his insights on the key takeaways from the exercise, emphasizing that when a large power system event occurs the industry needs to determine who has responsibility in prioritizing power distribution as the grid comes back online. Dan Skaar added that he participated in the executive tabletop exercise, where he found that more defined coordination is needed across the multiple governmental jurisdictions and agencies that oversee the power grid when a wide spread power system event escalates. Skaar and Fjalstad responded to questions from the board. Vice chair Richard Doying joined the meeting by teleconference at 9:55 a.m. 11. Canadian Matters Sara Patrick, Vice President Enforcement and Regulatory Affairs, provided a report on MRO s regulatory activities as a cross-border Regional Entity, noting that MRO s relationship with the Canadian governments continues to evolve. In Manitoba, the Provincial Government has been working on a filing to adopt an updated list of Reliability Standards with an anticipated effective date of July 1, In Saskatchewan, Patrick reported that SaskPower revised its Memorandum of Understanding with NERC and MRO in 2015 to establish a separate business unit called the Saskatchewan Electric Reliability 24 of 84

25 AGENDA 7 - Consent Agenda Authority (SERA) for the implementation of Reliability Standards. The revised MOU authorizes MRO to conduct compliance monitoring activities and provide enforcement recommendations to SERA. She informed the board that she and Russ Mountjoy attended a SERA meeting in November where she shared MRO s regulatory philosophy and approach to enforcement. Patrick responded to questions from the board. The board recessed at 10:00 a.m. and reconvened at 10:18 a.m. Jeff Gust did not return to the meeting. Chair Mogensen and President Skaar presented board member Shane Mailey from Manitoba Hydro with a plaque thanking him for his service and contributions to the MRO Board and the electric utility industry. Chair Mogensen recommended the board approve a resolution (attached as Exhibit D) acknowledging Mr. Mailey s accomplishments. Upon motion duly made and seconded, the board unanimously approved the resolution recognizing board member Shane Mailey. Shane Mailey expressed his appreciation and stated that he continues to be impressed with MRO staff and his colleagues on the board. He added that it has been an honor serving. Dr. Amin rejoined the meeting at 10:20 a.m Treasury Report and 2016 Outlook Finance and Audit Committee Member Larry Koshire provided the year-end Treasury Report and thanked MRO staff for doing a great job managing the budget. He also described specific variances to the budget and provided an outlook into Board Consent Agenda a. Approve the meeting minutes from the MRO Board of Director s October 1, 2015 meeting. Upon motion duly made and seconded, the board approved the minutes from the MRO Board of Directors meeting on October 1, 2015, as written. b. Approve new Organizational Group Appointments. The board reviewed and approved new organizational group appointments since the last board meeting. A list of organizational group appointments is provided as Exhibit E. Upon motion duly made and seconded, the board approved the organizational group appointments, as presented. 14. Review and Approve 2016 MRO Strategic Objectives Dan Skaar provided a report on the proposed 2016 strategic objectives, noting that the objectives had been reviewed and discussed by the board at its executive session on December 9. Skaar reviewed the objectives and related targets with the board, and noted that based on the board s discussion during the closed session the stretch target for the first tactic under the third objective will be revised to reflect a 25 percent dismissal rate of selfreported CIP violations. Chair Mogensen asked for any additional comments or revisions 25 of 84

26 AGENDA 7 - Consent Agenda on the objectives. Hearing none, she called for a motion to approve the 2016 Strategic Objectives. Upon motion duly made and seconded, the board approved the 2016 Strategic Objectives, subject to the revisions discussed. 15. MRO Operations Report a. Event Analysis Report. MRO Vice President Operations, Dan Schoenecker, reviewed the status of recommendations from events in the MRO Region and reported three new power system events since the last board report. He noted that MRO staff provides this summary report to the board quarterly. Schoenecker also reported on a change to the categorization of EMS events, and stated that MRO continues to use the event analysis process on all categories of events. He closed by informing the board that there is a significant effort underway by staff and the MRO Operating Committee to identify meaningful trends related to misoperations, and that staff will have more to report at the board s first quarter meeting of There were no questions on Schoenecker s report. 16. Standing Committee Annual Reports The following are highlights from the technical standing committee s year-end annual reports provided to the board by the committee chairs. The full committee reports can be found in the meeting agenda packet on MRO s website. a. NERC CIPC Report. The NERC Critical Infrastructure Protection Committee (CIPC) report was moved up in the agenda. MRO representative on the CIPC, John Hochevar, stated that the CIPC is not scheduled to meet again until December He reviewed voting members of the CIPC and the duties of the committee, and provided key agenda topics for the CIPC s December meeting. He also provided information on the new E-ISAC and changes to its portal, recent legislative changes, and FERC s upcoming technical conference on supply chain security. Hochevar provided his insights on a new book by Ted Koppel titled Lights Out, and stated the book emphasizes the need to plan, prepare and practice from a family and community standpoint. He closed by sharing his organization s (American Transmission Company) experience as a participant in GridEx III, and noted it will be sharing lessons learned with NERC. He responded to questions from the board. b. Operating Committee (MRO OC) MRO OC Vice Chair, Dean Schiro, provided a report on the annual activities of the MRO OC. He noted the MRO OC s efforts in 2015 to address risk in the MRO Region in the areas of Human Performance and System Protection System Misoperations. He stated that both of these topics will be on the agenda for the 2016 MRO Reliability Conference. Regarding relay misoperations, Schiro stated that the Protective Relay Subcommittee has made great progress categorizing historic misoperations according to scheme type to identify which schemes are most associated with misoperations. Schiro also reported on other 2015 activities related 26 of 84

27 AGENDA 7 - Consent Agenda to event analysis, metrics and trends, stakeholder outreach, modeling and reliability assessment coordination. He stated that the MRO OC is now receiving quarterly reports from the Reliability Coordinators in the MRO Region containing matters pertaining to regional reliability. Schiro stated these efforts will continue into MRO OC Member Tim Nissen provided information on a white paper that an MRO OC Task Force is developing on reducing knowledge-based human errors. Nissen reviewed the top three human errors that cause misoperations and stated that the white paper will provide ways to identify, minimize or prevent these errors. Nissen noted the white paper is anticipated to be published in early 2016, and is intended to assist utilities in the region in developing the appropriate procedures related to human performance. Dick Pursley, MRO s Representative on the NERC Operating Committee (OC), informed the board that the OC does not meet again until December He highlighted the activities and accomplishments of the OC in 2015 and reviewed important agenda topics for the OC s December meeting. He highlighted a report from the Essential Reliability Services Task Force containing measures that provide insight into the impacts of the changing resource mix. Pursley also noted the OC will review two reliability guidelines under development and the Long Term Reliability Assessment. c. Planning Committee (MRO PC) MRO PC Chair, Gayle Nansel, provided the board with a report on the 2015 activities and accomplishments of the MRO PC and its subgroups. Nansel reported that the MRO PC reviewed the Clean Power Plan (CPP) strategies of the Planning Coordinators in the MRO Region and will continue this review in She stated that 2015 brought a realignment of modeling efforts to meet the needs of the new modeling standards and that the MRO PC is reviewing its efforts related to modeling in the MRO Region. On behalf of MRO s representative on the NERC Planning Committee (PC), John Seidel, MRO Senior Manager Reliability and Operations, provided a report on the 2015 activities and accomplishments of the PC. He highlighted efforts related to synchrophasors, short-term and seasonal reliability assessments, and the impacts of the CPP. Seidel noted that the PC reviewed draft tutorials developed by NERC intended to educate policy makers on reliability efforts, and stated the tutorials are expected to be published in early d. Standards Committee (MRO SC) Robert Thompson, MRO SC Chair, provided a report on the 2015 activities and accomplishments of the MRO SC and its subgroups. He stated that the MRO OC reviewed and revised the charters for the NERC Standards Review Forum (NSRF) and the Subject Matter Expert Teams (SMET), and recommended that the board approve the revised charters at this meeting. 27 of 84

28 AGENDA 7 - Consent Agenda Upon motion duly made and seconded, the board approved revisions to the subgroup charters of the NERC Standards Review Forum and the Subject Matter Expert Teams, as presented. Thompson reported that the MRO SC is in the process of conducting a five-year review of MRO s Regional Standards Process Manual, which will be presented for board approval at its first quarter meeting in He highlighted the efforts of an MRO SC subgroup to develop a Standard Authorization Request (SAR) to reduce unnecessary or redundant requirements, and reported that the subgroup has developed a SAR to submit to NERC to retire requirement R3 of the VAR (Voltage and Reactive Control) Reliability Standard. Thompson also reported on Standard Application Guides developed in 2015 and under development for In closing, Thompson provided highlights of the activities of MRO SC subgroups and responded to questions. On behalf of MRO s Representative on the NERC Standards Committee (SC), Thompson informed the board that the SC is not scheduled to meet until December Thompson provided an overview of agenda topics for that meeting and reviewed the SC s 2015 activities and accomplishments. He highlighted NERC s Reliability Standards Development Plan, and noted that the steady state relates to the development of the standards. Thompson also reviewed the status of process improvement initiatives, stating that the new drafting team training modules have improved the standards development process. He closed by reviewing other areas of focus for the SC that will continue into e. Compliance Committee (MRO CC and NERC Compliance and Certification Committee (CCC)) MRO CC Chair, Terry Bilke, provided a report on the 2015 activities and accomplishments of the MRO CC and its subgroups. Bilke also reported on the 2015 activities of the NERC CCC, highlighting the work of the Reliability Issues Steering Committee to identify and address ERO-wide risks. He stated that riskbased registration was a topic at the last meeting of the CCC and reported that NERC is considering changes to the Rules of Procedure to accommodate the effort. Bilke also discussed the topic of guidance and provided his insight on development strategies. Bilke responded to questions from the board. Bilke informed the board that the MRO CC reviewed and proposed revisions the Performance and Risk Oversight Subcommittee s Charter for board consideration at this meeting. Upon motion duly made and seconded, the board approved revisions to the Performance and Risk Oversight Subcommittee Charter, as presented. The board recessed for lunch at 12:15 p.m. and reconvened at 1:13 p.m. Mike Risan and Bob Harris did not rejoin the meeting. 28 of 84

29 AGENDA 7 - Consent Agenda 17. Board and Committee Reports a. Hearing Body Hearing Body Chair, Ray Wahle, reported that the Hearing Body met in December to review proposed changes to the ERO Hearing Procedures and discuss potential changes to its role and responsibilities. He stated that the Hearing Body will continue these discussions in b. Finance and Audit Committee (FAC) FAC member Larry Koshire stated that the year-to-date financials were included in the agenda materials. He provided a report on the FAC s October meeting, noting that FERC issued an order in November accepting the 2016 business plans and budgets of NERC and the Regions. Koshire reported that the FAC reviewed MRO s VEBA Trust and MRO s investment firm, along with the committee s charter and related financial policies. He stated that staff also provided an update on the status of the application to switch to a 501(c)(3), which was filed in November. Koshire reported that as part of if its annual duties, the committee also reviewed MRO s fiduciary coverage and business liability insurance policies. He noted that a list of FAC duties was included in the agenda materials. c. Governance and Personnel Committee (GPC) GPC Chair, Brad Cox, drew the board s attention to the report in the agenda packet and reviewed the recent activities of the GPC. He highlighted information provided by staff at the committee s November meeting related to employee and personnel matters, and stated there have been no reports on the Whistleblower Hotline this quarter. Cox reported that as part of the GPC s annual duties, the committee reviewed proposed edits to the organization s policies and procedures, the board committee charters, and the four technical standing committee charters. He stated that redline and clean copies were included in the agenda materials for board consideration. Upon motion duly made and seconded, the board approved revisions to the organization s policies and procedures, the board committee charters, and the technical standing committee charters, as presented. Chair Mogensen thanked the GPC for its work and accomplishments in 2015 and thanked Chair Cox for his leadership efforts. d. Dispute Resolution Committee (DRC) DRC Chair, Gordon Pietsch, informed the board that the committee was successful in meeting its responsibilities in President Skaar asked the board to consider moving the strategic planning process ahead in the year to better align with NERC and the ERO. He stated this would require the board to simply review the strategic plan in 2016 and perform a deep dive of the plan in early The board agreed with staff s recommendation, and a board member also suggested the plan be adjusted to provide a three to five year outlook. 29 of 84

30 AGENDA 7 - Consent Agenda 18. External Affairs Report Miggie Cramblit reported on recent outreach efforts of MRO staff and future outreach opportunities in a. Review Annual Stakeholder Survey Results Cramblit highlighted the results of MRO s annual 2015 stakeholder survey. She reported that based on the comments received on the CIP Version 5 question, the entities in the MRO Region appear prepared for the transition. She noted that the ratings were significantly improved over last year s survey in the areas of Service, Communications, Training and Education, Reliability Improvement and Leadership. Cramblit stated that similar to last year, areas for improvement are response rates and timing. She noted that MRO will continue its focus on improving these areas in b. ReliabilityFirst Board and Committee Meetings Cramblit reported that she, Dan Skaar and Sara Patrick attended RelaibilityFirst s December board and committee meetings and provided her key takeaways. Based on her attendance at other Region s board meetings in 2015, she will work with the Governance and Personnel Committee in 2016 to consider possible changes to the MRO Board meeting structure. c. FERC Meetings Cramblit reported that MRO staff also met recently with FERC Office of Enforcement staff, including Deputy Director Larry Parkinson. She stated the meeting was very positive and that Parkinson was open to future meetings. They also met with Commissioner Honorable, whose comments related to cooperation and moving our collective work forward. Cramblit noted that Honorable related electric reliability to pipeline safety, which supports High Reliability Organization theory. 19. Other Business Silvia Parada Mitchell gave special thanks to MRO s technical standing committees for their hard work and efforts to address regional risks is Adjourn Having no further business to discuss, the meeting was adjourned at 1:38 pm. A complete list of decisions from this meeting has been compiled and is attached as Exhibit F. 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 84

31 AGENDA 7 - Consent Agenda Exhibit A Meeting Attendees Board Members Present Teresa Mogensen Xcel Energy, Chair Richard Doying MISO, Vice Chair (by teleconference) Bob Harris Western Area Power Administration (by teleconference) Brad Cox Tenaska Power Services Chris Fleege Minnesota Power Doug Johnson American Transmission Company Dr. Massoud Amin Independent Director Gordon Pietsch Great River Energy Iqbal Dhami SaskPower (by teleconference) Jeffrey Gust MidAmerican Energy Company JoAnn Thompson Otter Tail Power Company Ken Goldsmith Alliant Energy Larry Koshire Rochester Public Utilities Micheline Casey Independent Director Mike Risan Basin Electric Power Cooperative (by teleconference) Ray Wahle Missouri River Energy Services Shane Mailey Manitoba Hydro Silvia Parada-Mitchell NextEra Energy Thomas Vitez ITC Holdings MRO Staff Dan Skaar President and Chief Executive Officer Dan Schoenecker Vice President Operations Carolina Margaria Administrative Assistant Jessica Mitchell Assistant Corporate Secretary John Seidel Senior Manager Operations and Reliability Ken Gartner CMEP Process Principal Miggie Cramblit Vice President General Counsel, Corporate Secretary and Director External Affairs Rafik Halim Sr. Compliance Engineer Richard Burt Vice President Risk Assessment and Mitigation, and Standards Russ Mountjoy Standards, Registration and Certification Manager Sara Patrick Vice President Enforcement and Regulatory Affairs Steen Fjalstad Security and Mitigation Principal Sue Clarke Vice President Finance and Administration Tom Tierney Vice President Compliance Guests: Bruce Wagar Public Charles Berardesco NERC Staff Darrell Piatt Federal Energy Regulatory Commission Dean Schiro Xcel Energy Dick Pursley Great River Energy Gayle Nansel Western Area Power Administration John Hochevar American Transmission Company Robert Thompson Xcel Energy 31 of 84

32 AGENDA 7 - Consent Agenda Ron Gunderson Scott Henry Sonia Mendonca Terry Bilke Thad Ness Tim Nissen Nebraska Public Power District SERC NERC Staff MISO Xcel Energy Omaha Public Power District 32 of 84

33 AGENDA 7 - Consent Agenda Exhibit B President s Report DECEMBER 10, 2015 Dan Skaar Thank you for attending our last meeting for 2015 and our annual member meeting. I would like to welcome our guests; their bios are in your agenda materials. Charlie Berardesco is Senior Vice President and General Counsel at NERC, and has been with NERC for over three years. He came to NERC at a point in time where relationships were strained between NERC and FERC and he has been instrumental in strengthening that relationship. We very much appreciate his continued wise counsel and leadership as we develop the ERO Enterprise. Sonia Mendonca is Vice President of Enforcement and Deputy General Counsel. Under Sonia s leadership we have successfully reduced the backlog of violations and launched the RAI. Sonia and Sara continue to partner and lead the ERO Enforcement Group as we achieve greater consistency and work toward a common enforcement philosophy. Welcome back, both of you. And, Scott Henry. My colleague from the south, President and CEO at SERC Reliability Corporation. I wanted to thank him for chairing the Regional Entity Management Group for the last two years; not an easy job. Lane Lanford from Texas RE will be assuming the role in Welcome, Scott. As we close out the year, I also want to thank our board, committee members, and staff for their work to make this another successful year. From a staff standpoint, we have never been stronger. We have the right people in the right positions with the right mission and motivation. This is evident as a result of our latest staff engagement survey, where we continue to score well above the 75 th percentile of companies across the country that participate in the Gallup12 process that measures employee engagement. The underlying evidence from Gallup is that highly engaged employees deliver superior results. For example, we see the Gallup12 results as strong correlation with high stakeholder satisfaction. All stakeholder satisfaction dimensions that were measured in our annual stakeholder survey had combined good and excellent ratings of over 80 %, with several dimensions improving over already high levels. On the strategic objectives for 2015, we did a good job with the help of our stakeholders. First, in our objective to simplify regulation, we are on track to file a Standard Authorization Request with NERC staff to eliminate redundant requirements, and many of the standards projects 33 of 84

34 AGENDA 7 - Consent Agenda over the next few years will resolve other unnecessary requirements. This is our first effort to stand up a process that provides feedback from the work we do to the NERC Standards Development process. Formalized feedback loops are also being established through the ERO enforcement working group and this effort will be expanded in And, we have published a roadmap for more simplification through more structure around field operations. Ultimately, by adopting the same processes and procedures we will be able to have ERO-wide metrics, drive efficiencies, and set performance expectations. Second, with greater discretion through professional standards around risk methods, comes a responsibility to assure discretion is exercised with proper rigor and without discrimination in our CMEP activities. Both phases of our internal quality assurance program are fully implemented with quarterly reports to the board. We are now expanding it to all CMEP activities. Third, improving clarity of the standards. Through our technical standing committees, application guides have been completed on the following new and revised standards: TPL-001, PRC-005, and FAC-008. In addition, the CIP-002 Version 5 application guide was completed at the end of last year and is widely used across the country. We have hosted workshops around CIP Version 5 and have worked one-on one with many entities to assist them with their technical transition challenges, including a number of entities new to the CIP program. In 2016, we will continue to build on the very positive outreach work we did in Fourth, improving consistency. We have implemented the key aspects of C-SAG or the CMEP Standards and Guidance. This goes hand-in hand with the internal quality assurance program. We have to set standards for the conduct of our work and, measure ourselves against those standards. At MRO, we are doing that. Additionally, NERC has committed to develop a CMEP Staff Manual to help set the standards for all of our work and has adopted the ethical framework for the conduct of CMEP work using the Yellow Book the basis for C-SAG. Last, coordinating policy communications across NERC, the Regions and FERC. MRO staff and board members have attended meetings and met one on one with NERC Trustees, FERC Commissioners, and other Regional leadership to develop a better understanding of the key challenges facing our industry. Through this process, we are better able to appreciate our colleagues and, more importantly, learn from them as we seek continuous improvement in our own operations. For next year, we have more challenges new CIP standards, defining our role in CPP, and reshaping our regulation to be more responsive and more meaningful to our stakeholders. Even though the challenges may be different in 2016 and beyond, we will stick to using High Reliability Organization principles in our regulatory approach do our jobs to keep the small stuff small and be prepared. In closing, I want to especially thank Teresa and her leadership as the chair of our board. Her leadership themes around teamwork and value have been very much in step with the way we lead at MRO. And, I am happy she will remain on the board. 34 of 84

35 AGENDA 7 - Consent Agenda While I will miss her as chair, I welcome current vice chair Richard Doying to take the helm as chair and Silvia Parada Mitchell as our vice-chair. End of report. 35 of 84

36 AGENDA 7 - Consent Agenda Exhibit C Chair s Remarks DECEMBER 10, 2015 Teresa Mogensen, Chair Good morning everyone and welcome to the final MRO Board of Directors meeting for Thanks again to our guest speakers and all those joining us at our meeting today -- your presence and participation enhance the experience for all of us. As this year draws to a close, so too does my two year term as chair of this board. As we move into the time of holiday celebrations, so too do I begin to celebrate handing the reins over to my capable vice chair, Richard Doying. Good luck Richard, I know you will do a great job. To my director colleagues - I have been honored to serve as your chair. Thank you for your trust, and I look forward to rejoining your ranks in To Dan and the MRO management and staff - you do an excellent job every day working to carry out the mission of the MRO. You exemplify a "high reliability organization," and I was proud to represent you at NERC and elsewhere. To our registered entities - thank you for taking your obligations seriously, and striving to achieve reliability excellence rather than just the minimum required. I was also proud to represent you, and together we are truly making a difference for the people and communities we collectively serve. Over these past two years we've done a lot of work to ensure and enhance reliability. MRO s areas of strategic focus for 2015 will continue in Those five areas are: Simplification of Regulation Implementation of Risk-Based Methodologies Clarification of Standards Greater Consistency with MRO and Across the ERO Coordination of Key Policy Issues We've achieved our 2015 objectives that support these five strategic areas. Our efforts in 2016 will be built on this work, deepening and broadening our efforts. I'm very pleased with what we've accomplished, especially with the implementation of the Reliability Assurance Initiative, the role we played in establishing NERC s Compliance Guidance Policy, and the work we've done to help MRO Registered Entities prepare for the CIP Version 5 transition next year. As we meet current challenges, new ones always appear on the horizon. A really big one is the evolution of energy policy and its associated impact on the energy infrastructure of North America. Our resource mix is transforming - changing size, fuel, location, and dispatchability. Resources are distributing into smaller and smaller segments, located throughout the transmission and distribution grids. This changes the nature of what is needed to ensure continued reliability. The foundation of reliability, and optionality to support energy choices, is a robust grid. We must work together to educate legislators, regulators and the public about the value of the grid and the importance and value of investing in electric infrastructure. 36 of 84

37 AGENDA 7 - Consent Agenda Education and a relevant analytical backdrop are critical services NERC can provide to give US states the contextual framework they need to develop their responses to the Clean Power Plan. The electric system will go through multiple states of transition as it transforms into the system of the future. So too will the other systems that support the electric system, like the gas pipeline and communication infrastructures. We need to pay attention to all the changing factors that have the potential to impact electric reliability. NERC will need to assess and issue multiple studies that model the interim states of transition as plants retire and new resources are phased into the system. We also need legislation that will require all resources, no matter how small, to be registered so that grid planners and operators know where and how big each source is. Without this critical information we can't adequately plan and operate the grid to support all the desired options and choices and still ensure reliability. With this, I'm confident that, working together, with high reliability and delivering value as our guiding principles, we will be able to meet each new challenge as it comes. Thank you. 37 of 84

38 AGENDA 7 - Consent Agenda Exhibit D Resolution Recognizing Shane Mailey RESOLUTION MIDWEST RELIABILTIY ORGANIZATION BOARD OF DIRECTORS Resolution Regarding Appreciation of Shane Mailey WHEREAS, Shane Mailey of Manitoba Hydro has served as a member of the Board of Directors and its committees; and WHEREAS, he has supported reliability of the Bulk Power System in the Midwest Reliability Organization Region; and WHEREAS, he has given to Midwest Reliability Organization thoughtful leadership and constructive work. NOW, THEREFORE, BE IT RESOLVED by Midwest Reliability Organization that the following resolution is adopted and is to be appropriately conveyed to Shane Mailey: RESOLVED that the Board of Directors of Midwest Reliability Organization express their appreciation to Mr. Mailey 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 84

39 AGENDA 7 - Consent Agenda Exhibit E Organizational Group Appointments MRO Compliance Committee o Wayne Guttormson, SaskPower, Canadian Utility Sector, term ends December 2018 o Janell T. Johnson, Willmar Municipal Utilities, Municipal Utility Sector, term ends December 2018 o Mahmood Safi, Omaha Public Power District, Cooperative Utility Sector, term ends December 2018 o Karen S. Demos, NextEra Energy Resources, LLC, Generator and/or Power Marketer Sector, term ends December 2017 MRO Performance and Risk Oversight Subcommittee (PROS) o Garth Ormiston, SaskPower, Canadian Utility, term ends December 2018 o Doug Johnson, American Transmission Company, Transmission System Operator, term ends December 2018 Operating Committee o Dennis Florom, Lincoln Electric Systems, Municipal Utility Sector, term ends December 2018 o David Meyer, Glencoe Light and Power Commission, Municipal Utility Sector, term ends December 2018 o Lloyd Linke, Western Area Power Administration, Federal Power Marketing Agency, term ends December 2018 o Dick Pursley, Great River Energy, Cooperative Utility Sector, term ends December 2018 o Tim Nissen, Omaha Public Power District, Cooperative Utility Sector, term ends December 2016 (filling the At-Large Generator and/or Power Marketer Sector Seat) Protective Relay Subcommittee (PRS) o Grant Gunderson, Minnkota Power Cooperative, Minnesota, term ends December 2018 o Brian Fettig, Montana-Dakota Utilities, Dakotas, term ends December 2018 Planning Committee o Randy Anderton, Rochester Public Utilities, Municipal Utility Sector, term ends December 2018 o Mark Wehlage, Xcel Energy, Investor Owned Utility Sector, term ends December 2018 o Dale Burmester, American Transmission Company, Transmission System Operator Sector, term ends December 2018 o Wayne Guttormson, SaskPower, Canadian Utility Sector, term ends December 2017 (filling the At-Large Generator and/or Power Marketer Sector Seat) 39 of 84

40 AGENDA 7 - Consent Agenda Model Building Subcommittee o Mr. David Brauch, Xcel, Minnesota geographic area seat, term ending December 2016 Standards Committee o Wayne Guttormson, SaskPower, Canadian Utility Sector, term ends December 2018 NERC Standards Review Forum (NSRF) o Michale Brytowski, Great River Energy, Cooperative Utility Sector, term ends December 2018 o Kayleigh Wilkerson, Lincoln Electric Systems, Municipal Utility Sector, term ends December 2018 o Mahmood Safi, Omaha Public Power District, Cooperative Utility Sector, term ends December 2018 o Chuck Lawrence, American Transmission Company, Transmission System Operator, term ends 2018 NERC Subcommittees and Working Groups o Ryan Westphal, MISO, Transmission System Operator Sector as representative on Reliability Assessment Subcommittee (RAS) Reports to MRO Planning and Operating Committees 40 of 84

41 AGENDA 7 - Consent Agenda Exhibit F Decision List AGENDA ITEM Agenda 13 - Consent Agenda Resolution recognizing Shane Mailey Agenda 14 Strategic Planning Report Agenda 16 Technical Committee Annual Reports Agenda 17 Board Committee Reports Report DECISION a. Approve the meeting minutes from the MRO Board of Director s October 1, 2015 meeting. Upon motion duly made and seconded, the board approved the minutes from the MRO Board of Directors meeting on October 1, 2015, as written. b. Approve new Organizational Group Appointments. The board reviewed and approved a new organizational group appointment since the last board meeting. Upon motion duly made and seconded, the board approved the organizational group appointment, as presented. Upon motion duly made and seconded, the board unanimously approved the resolution recognizing board member Shane Mailey. Review and Approve MRO s 2016 Strategic Objectives. Upon motion duly made and seconded, the board approved the 2016 Strategic Objectives, subject to the revisions discussed. c. Standards Committee (MRO SC) Robert Thompson, MRO SC Chair, reviewed the revised the charters for the NERC Standards Review Forum (NSRF) and the Subject Matter Expert Teams (SMET), and recommended that the board approve the revised charters at this meeting. Upon motion duly made and seconded, the board approved revisions to the subgroup charters of the NERC Standards Review Forum and the Subject Matter Expert Teams, as presented. Compliance Committee (MRO CC and NERC Compliance and Certification Committee (CCC)) MRO CC Chair, Terry Bilke, reviewed proposed revisions to the Performance and Risk Oversight Subcommittee s Charter for board consideration at this meeting. Upon motion duly made and seconded, the board approved revisions to the Performance and Risk Oversight Subcommittee Charter, as presented. c. Governance and Personnel Committee (GPC) On behalf of the GPC, Chair Cox recommended the board approve changes to the organization s policies and procedures, board committee charters, and technical standing committee charters. Upon motion duly made and seconded, the board approved revisions to the organization s policies and procedures, board committee charters, and technical standing committee charters, as presented. 41 of 84

42 AGENDA 7 - Consent Agenda MIDWEST RELIABILITY ORGANIZATION Draft Minutes of the Annual Board of Directors Meeting MRO Offices, St. Paul, MN December 10, :50 to 2:03 p.m. 1. Call to Order and Welcome New Board Members MRO Board Chair Teresa Mogensen called the annual meeting of the board of directors to order at 1:50 p.m. Richard Doying and Iqbal Dhami 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 still present. A complete list of attendees is included as Exhibit A. Pursuant to Policy and Procedure 4, Cramblit presented MRO s Standards of Conduct, Conflict of Interest and Anti-Trust Guidelines to the board. 3. Chair and Vice Chair Election Teresa Mogensen stated that her term as board chair has expired and that current vice chair Richard Doying was willing take the helm as chair in Mogensen stated that a nomination for vice chair was received for Silvia Parada Mitchell, and called for any objections or additional nominations. Hearing none, she called for a motion to elect Richard Doying as board chair and Silvia Parada Mitchell as board vice chair for Upon motion duly made and seconded, the board elected Richard Doying as MRO Board Chair and Silvia Parada Mitchell as MRO Board Vice Chair for Richard Doying thanked the board and stated he is honored to serve as chair in MRO Board Committee Appointments Chair Mogensen reviewed the proposed 2016 committee appointments with the board and called for any objections or additional nominations. Hearing none, Mogensen called for a motion to approve the 2016 board committee appointments. Upon motion duly made and seconded, the board approved the board committee appointments for Mogensen thanked board members for their continued participation on MRO Board committees. A list of 2016 board committee appointments is included as Exhibit B. 5. Other Business The board discussed revising the June 2016 meeting dates to June 29-30, of 84

43 AGENDA 7 - Consent Agenda Upon motion duly made and seconded, the board approved rescheduling its second quarter meeting to June 29-30, 2016, as proposed. Additionally, the board reviewed and discussed the following meeting dates for March 15-16, 2017 June 21-22, 2017 September 13-14, 2017 November 29-30, 2017 Upon motion duly made and seconded, the board approved of the 2017 board meeting dates, as proposed. Upon further discussion, the board directed staff to consider dates for the board s strategic planning session in Staff will review and recommend a date for approval at the board s first quarter meeting in On behalf of the entire board, Dr. Amin thanked Teresa Mogensen for her leadership as chair over the past two years. 6. Adjourn The meeting was adjourned at 2:03 pm. 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 43 of 84

44 AGENDA 7 - Consent Agenda AGENDA 7 Consent Agenda b. Review and Approve New Standing Committee Appointments Jessica Mitchell, Assistant Corporate Secretary Date: March 3, 2016 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve Working Group Appointments Review and Approve Working 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. NERC Critical Infrastructure Protection Committee Damon Ounsworth, Senior Security Specialist at SaskPower, was nominated by the MRO Standards Committee to serve on the NERC Critical Infrastructure Protection Committee (CIPC) as an MRO representative (Operations). Anthony Rowan, Senior Manager West Regional Operations at MISO has been nominated to become the Alternate NERC CIPC representative (Operations). Performance & Risk Oversight Subcommittee Karen Demos, Principal Compliance Analyst at NextEra Energy Resources, LLC, was nominated by the MRO Compliance Committee to serve on the MRO Performance & Risk Oversight Subcommittee (PROS). CLARITY ASSURANCE RESULTS 44 of 84

45 AGENDA 8 - MRO Operations Report AGENDA 8 MRO Operations Report a. Event Analysis Report Dan Schoenecker, Vice President Operations Date: March 3, 2016 To: From: Subject: Action: MRO Board of Directors Dan Schoenecker, Vice President Operations Event Analysis Report None - Information and Discussion Dear Board Members: The following is an update on the recommendations and lessons learned from past events and includes a brief summary of the events that have been reported to MRO since the last board meeting. Changes and/or updates from last quarter s report to the board are in Red. Recommendations, Lessons Learned and Past Events Follow-up: November 3, 2014 SPS misoperation and HVDC reduction in Manitoba (Cat 1c event): The event is open pending cause-coding. Maintenance staff at Dorsey inadvertently initiated a HVDC reduction of 1532 MWs. The entity was able to restore the HVDC loading within 11 minutes. The HVDC bipole 1 required a loading limit of 1200 MWs for one hour until filter banks were returned to service. Approximately 4000 customers were disrupted by Under Frequency Load Shed for 40 minutes during the event. November 9, 2014 Partial Loss of EMS in Minnesota (Cat 1h event): This event is open pending cause-coding EMS AP node 1 initiated a reboot after receiving a shared memory error message. EMS AP node 2 successfully took over control of the functions of node 1, but experienced a network timeout and was also taken offline. Having both EMS AP nodes offline resulted in the loss of Alarms Processing, State Estimator, ICCP, and Contingency Analysis, however communications with the RTUs was not disturbed and the entity retained control to remote devices. Alarm Processing was recovered in 28 minutes, ICCP was returned to normal in 37 minutes, and State Estimator and Contingency Analysis functionality in 116 minutes. 45 of 84

46 AGENDA 8 - MRO Operations Report December 16, 2014 Partial Loss of EMS in Minnesota (Cat 2b event): This event is open pending cause-coding EMS AP node 2 was removed from service due to an operating system failure. EMS AP node 1 failed while attempting to take over the functions of node 2 resulting in a complete EMS system failure. Full EMS functionality was returned in 35 minutes. During the outage of the primary EMS the backup EMS system remained on line but the entity choose to dedicate resources to restoration of the primary EMS rather than to failing over to the secondary EMS. March 5, 2015 Partial Loss of EMS in Minnesota (Cat 2b event): This event is open pending cause-coding. During scheduled maintenance, there was a loss of communications to the EMS computer due to an issue that developed when the network core switches were being upgraded. The switches were restarted and communication was restored to the EMS. April 11, 2015 Misoperation of SPS/RAS in South Dakota (Cat 1c event): This event is open pending cause-coding While commissioning new relays at a 345-kV Substation, an inadvertent direct transfer trip signal was sent to the adjacent 230-kV Substation causing a Remedial Action Scheme (RAS) runback signal to be sent to two DC interconnection ties. The first DC tie was transferring 106 MW West to East at the time of the event and the RAS operated as intended. The second DC tie was transferring 110 MW West to East at the time of the event; however the second did not ramp back, contrary to design. Notification was made to the RC. No thermal or voltage limits were exceeded when the second DC tie failed to runback. May 19, 2015 Loss of Three or More BES Elements in North Dakota (Cat 1a event): This event is open pending cause-coding. The Bismarck Glenham 230-kV line opened and reclosed automatically from the Glenham line terminal due to a Phase A to Ground fault approximately 9.5 miles from the Bismarck Substation. Approximately 11 milliseconds following the initial line operation, breaker failure was asserted from the Bismarck line relay, clearing the Bismarck 230-kV East bus. This opened the Bismarck- Jamestown #2 230-kV line, Bismarck-Hilken 230-kV line, the Bismarck 230/115-kV transformer KV8A, and the Bismarck-Glenham 230-kV line at the Bismarck terminal. No adverse weather was in the area at the time of the Bismarck-Glenham 230-kV line relay operation. Investigation of the Bismarck relay identified an error in the breaker failure logic this error has since been corrected. June 22, 2015 Loss of Three or More BES Elements in South Dakota (Cat 1a event): This event is open pending cause-coding. At 0452, the Sioux Falls Flandreau 115-kV line relayed and resulted in a breaker failure misoperation at Sioux Falls, causing five breakers to open. This de-energized the Sioux Falls 115- kv West main bus, transformer KY1C 115/69-KV and transformer KV3A 230/115-kV. There was 46 of 84

47 AGENDA 8 - MRO Operations Report a severe thunderstorm in the area at the time of the event. Nine structures were reported down on the 69-kV system and approximately 40 structures on the115-kv system. Technicians found a polarity sensitive contact was wired incorrectly on the Sioux Falls Flandreau 115-kV line, resulting in the relay receiving a breaker failure initiate when it was placed in service. The 10 cycle timer had expired when placed into operation so the relay was ready to trip on fault current with no time delay. This event did not result in the loss of customer load. October 7, 2015 Partial Loss of EMS in Minnesota (Cat 1h event): This event is open pending cause-coding Deployment of a halon fire suppression system in a communication room at the entity s corporate office caused the connection to be lost to 50% of Remote Telemetry Units (RTUs) feeding data to their Energy Management System. As a result of this data loss, the entity s state estimator and contingency analysis failed to solve for approximately two and half hours. November 8, 2015 Partial Loss of EMS in Minnesota (Cat 1h event): This event is open pending cause-coding The network application program Security Analysis (SA) stopped solving and was unavailable for nearly 4 hours. The SA is a real-time contingency analysis tool used to analyze the electric system. Monitoring and control by SCADA continued to be available during this time. Initial review indicated that SA was not working because the State Estimator (SE) was diverging and not providing a solution. The cause of SE diverging was identified as due to equipment switching being done by a neighboring utility at one of their substations. The problematic bus was isolated using switching status override in EMS. The switching status override allowed both SE and SA to start solving. November 12, 2015 Partial Loss of EMS in Minnesota (Cat 1h event): This event is open pending cause-coding The network application program Security Analysis (SA) stopped solving and was unavailable for 49 minutes. The SA is a real-time contingency analysis tool used to analyze the electric system. Monitoring and control by SCADA continued to be available during this time. Initial review indicated that SA was not working because the State Estimator (SE) was diverging and not providing a solution. The cause of SE diverging was identified as due to equipment switching being done by a neighboring utility at one of their substations. The problematic bus was isolated using switching status override in EMS. The switching status override allowed both SE and SA to start solving. The Following New Events Have Been Reported Since the Last Report: Since the last board of directors meeting, there were three brief reports submitted for EMS events and four brief reports submitted for BPS events. 47 of 84

48 AGENDA 8 - MRO Operations Report November 18, 2015 Partial Loss EMS in Minnesota (Cat 1h event): This event is open pending cause-coding. The entity s network application program Security Analysis (SA) stopped solving because the State Estimator (SE) was aborting when processing anomalies present in the SCADA data. The Measurement Consistency Check configurable option was disabled in the state estimator. Doing this allowed both SE and SA to start solving. An investigation is underway to determine the cause of the state estimator aborting. The outage to contingency monitoring capability lasted 3 hours and 4 minutes. Monitoring and control by SCADA continued to be available during this time. November 24, 2015 Partial Loss EMS in Minnesota (Cat 1h event): This event is open pending cause-coding. The entity s network application program Security Analysis (SA) stopped solving because the State Estimator (SE) was diverging due to the loss of data from 77 RTUs. The loss of the 77 RTUs was caused by an outage to a fiber line. After discussions with the phone company, it was determined that the phone company was doing planned work on a dark (unused) fiber line and inadvertently outaged an in-service fiber line. There is an existing process in place for the phone company to notify the entity when work will be performed on their circuits. The outage to contingency monitoring capability lasted 2 hours and 6 minutes. Monitoring and control by SCADA continued to be available during this time. December 3, 2015: Adams Substation (Cat 1.a event): This event is open pending misop reporting and cause-coding. During restoration switching of a planned bus outage a Current Transformer (CT) shorting switch was inadvertently left in the shorted position. This caused the bus differential relaying to pick up clearing the bus and tripping three BES lines connected to the bus. After identifying the cause of the trip, the substation operator corrected the issue and obtained approval to continue switching to restore the bus. The bus and all associated BES lines were restored to service. On the day prior, the onsite relay technician & the substation operator discussed the CT shorting switches for the 6620 breaker. It was decided that the 6620 breaker would be left open at the completion of the day s work since it would be coming out of service again the following morning on a new equipment outage request. This inadvertently led to the breaker 6620 CT shorting switches not being tracked on the relay checklist for this new job. December 16, 2015: Blaisdell Substation (Cat 1.a event): This event is open pending misop reporting and cause-coding. 48 of 84

49 AGENDA 8 - MRO Operations Report The Blaisdell-Tioga 230-kV line relayed and did not reclose automatically. The Blaisdell 230/115- kv Transformer relayed to lock out. Concurrently the Berthold terminal of the Blaisdell-Berthold 115-kV line and the Stanley terminal of the Blaisdell-Stanley 115-kV line relayed to lock out. The Stanley 115-kV line relays operated at the beginning of this event, however Blaisdell breaker 6260 did not trip. This resulted in the Berthold breakers tripping on Zone 2 time. It was later revealed that downed fiber optic overhead ground wire caused the fault. There was a winter storm in the area with icing, snow and high winds during the event. December 17, 2015: Blaisdell-Logan in North Dakota Area (Cat 0 event): This event is closed. The Logan-Blaisdell 230-kV line relayed and reclosed successfully. Also the Garrison-Mallard- Prairie Winds North 115-kV line relayed and reclosed at the Mallard terminal, but did not reclose at the Garrison terminal, tripping the Prairie Winds North Wind Farm (101 MW output at the time). There was a winter storm in the area with icing, snow and high winds during the event. January 13, 2016 Partial Loss EMS in Minnesota (Cat 1h event): This event is open pending cause-coding. MISO was performing scheduled ICCP maintenance and one entity s ICCP link with MISO did not reestablish once the work was completed. There was a period of roughly an hour before the links could be established and data was transferring between that entity and MISO. This only applied to one of the three production connections the entity has with MISO. The entity worked with MISO s NOC team to identify and fix the issue and ensure it would be resolved going forward. When the ICCP link was interrupted, MISO put the entity s system on State Estimator mode, all advanced applications remained available at the entity. January 31, 2016: Council Bluffs Substation in Iowa (Cat 1.a event): This event is open pending mis-op reporting and cause-coding. A 161 kv line insulator failed causing a fault on the Council Bluffs to Bunge 161 kv line. The fault was cleared normally at both line terminals, and automatic reclosing was attempted at both line terminals as designed. The line fault reoccurred upon the automatic reclose operations. The Bunge line terminal again opened normally; however, the Council Bluffs line terminal breaker was delayed in clearing the fault, which resulted in three remote transmission facilities operating and two locking open, and two generating units tripping. Lessons Learned: The NERC Event Analysis Subcommittee (EAS) continues to develop and publish Lessons Learned from events. There were sixteen NERC Lessons Learned published in 2015, three were published since the last board meeting. You can find Lessons Learned at 49 of 84

50 AGENDA 9 - Standing Committee Reports Date: March 3, 2016 AGENDA 9 Standing Committee Reports a. MRO Operating Committee Report Dean Schiro, Chair To: From: Subject: Action: MRO Board of Directors Dean Schiro, MRO Operating Committee Chair MRO Operating Committee Report None - Information and Discussion Dear Board Members: The MRO Operating Committee (MRO OC) continues to meet face to face on a quarterly basis and by conference call/webex as needed. The most recent meeting was on February 2, Below is a brief summary of some key operational projects for the MRO OC and Protective Relay Subcommittee (PRS). Detailed MRO OC meeting agendas and minutes can be found at: 1. Reliability Coordinator Reports At each quarterly MRO OC meeting, the three Reliability Coordinators registered in the MRO Region provide a summary of how the BES has been performing and any operating concerns that may have arisen. The BES within the MRO Region has performed well thus far during the winter of 2015/16. SPP RTO noted deliverability to the Williston, ND area has been tight at times this winter, but exports from SaskPower, as well as the completion of some key reinforcements in the area has mitigated this risk. In the MISO footprint, colder than usual temperatures have occurred in MISO-South while warmer than usual temperatures have occurred in MISO-North. SaskPower also reported a pleasant winter due to El Nino. The MISO and SPP-RTO Reliability Coordinators continue to work on their market-to-market re-dispatch process to assure that wind curtailments and releases occur smoothly. This is important because the Nebraska North-South interfaces have large quantities of wind generation to the north and south of them and these interfaces can be sensitive to large step changes in wind generation. 2. MRO 2016 Reliability Conferences During February 2016, MRO staff and the MRO OC and MRO PC worked on plans for the 2016 MRO Reliability Conference. In past years, MRO has held one conference with a broad range of subjects. Based on feedback from the 2015 Reliability Conference, that attendees wanted to have more time dedicated to system protection systems and misoperations, MRO is currently planning to host two conferences in The first is scheduled for May 25, 2016 at MRO s St. Paul office, and will be dedicated to system protection related topics with an emphasis on misoperations and ways to reduce them. This workshop will also include some 50 of 84

51 AGENDA 9 - Standing Committee Reports presentations on Human Performance and ways to reduce human error. The second MRO Reliability Conference would be focused on the planning and operational impacts of the Clean Power Plan, the integration of renewables, and the Essential Reliability Services that will need to be maintained to ensure BES reliability. 3. Misoperations and their BES Impact Misoperations continue to play a significant role in system disturbances in terms of increasing the severity of events. Roughly 70% of reported events NERC-wide involve one or more misoperations. In 2015, MRO committed to help entities reduce misoperations by preparing a white paper on misoperations. Mark Gutzmann from Xcel Energy has been one of several Protective Relay Subcommittee members working on this paper and will present a status update to the board in the next agenda item. 4. Future MRO OC Meeting Dates in 2016: May 24, 2016 August 2, 2016 November 3, of 84

52 AGENDA 9 - Standing Committee Reports Date: March 3, 2016 AGENDA 9 Standing Committee Reports ai. Operating Committee s Work on Misoperations Mark Gutzmann, MRO Protective Relay Subcommittee Member To: From: Subject: Action: MRO Board of Directors Mark Gutzmann (Xcel Energy), MRO Protective Relay Subcommittee Member Protective Relay Subcommittee s Work on Misoperations None - Information and Discussion Dear Board Members: Misoperations continue to play a significant role in system disturbances in terms of increasing the severity of events. Roughly 70% of reported events NERC-wide involve one or more misoperations. In 2015, MRO committed to help entities reduce misoperations by preparing a white paper on misoperations. I have been one of several MRO Protective Relay Subcommittee members working on this paper, and I will provide a presentation on our efforts at the meeting. 52 of 84

53 AGENDA 9 - Standing Committee Reports Date: March 3, 2016 AGENDA 9 Standing Committee Reports aii. NERC Operating Committee (OC) Report Dick Pursley, MRO Representative on NERC OC To: From: Subject: Action: MRO Board of Directors Dick Pursley, MRO Representative on NERC OC NERC Operating Committee (OC) Report None - Information and Discussion Dear Board Members: The NERC Operating Committee (NERC OC) is scheduled to meet on March 8 and 9, 2016, after the board agenda is posted an updated report will be provided at the board meeting. The agenda for this NERC OC meeting includes the following items for discussion and/or action and is posted at: 1. Essential Reliability Services Working Group (ERSWG). As reported at the December board meeting, the NERC Board of Trustees reviewed and accepted the ERSWG Framework and Abstract Reports on December 7, The NERC Board requested continuation of ERS efforts, which included the transition of the task force to a working group. The ERSWG will define and develop sufficiency guidelines for each measure identified in the Framework Report. Reporting to the ERSWG will be a task force, which will focus on Distributed Energy Resources (DERTF). Deliverables for 2016 include a whitepaper on methodology for ERS Measures Sufficiency Guidelines and a final report of DERTF. The deliverable for 2017 is a final report of ERS Measures Sufficiency Guidelines. Action is required by the NERC Operating Committee (OC) to approve the ERSWG and DERTF scope documents. 2. Performance Analysis Subcommittee Status Report. The draft of the 2016 State of Reliability Report is nearing completion. A request will be made to appoint 2-3 OC members to review and comment on the draft report. 3. Development Status of Situation Awareness Reliability Guideline. The task team Chair, Lauri Jones, will provide a status update on the development of a strawman guidance document. 4. NERC OC and Subcommittee Work Plans for At its December 2015 meeting, the OC conducted a Work Plan Brainstorming Exercise. Chair Case reported that the OC Executive Committee and Subcommittee leadership would meet on February 2, 2016 to develop a draft 2016 NERC OC and Subcommittee Work Plan. Action is required to approve the 2016 NERC OC and Subcommittee work plans. 53 of 84

54 AGENDA 9 - Standing Committee Reports 5. NERC Action Plan to Address Frequency Response and FERC Notice of Inquiry (Primary Frequency Response). Dr. James Merlo will present an action plan to address frequency response developed by NERC staff. Specifically, the plan would create an outreach program to the existing generation fleet and potential changes to the FERC Large and Small Generator Interconnection Agreements. This initiative includes a plan to develop a data repository for generator survey modeling data that was collected in Review of 2015 Long-Term Reliability Assessment (LTRA) to Identify Recommendations for Development of Operational Guidelines. An OC subgroup reviewed the 2015 LTRA and will present their recommendations for the development of reliability guidelines to address items noted in the 2015 LTRA. These items include downward trending of reserve margins and changes to the resource mix. 7. North American Transmission Forum (NATF). Mr. Kevin Barent will provide an overview of recent NATF activities to promote open and candid exchange of information with the goal of improving the reliability of the transmission grid. 54 of 84

55 AGENDA 9 - Standing Committee Reports Date: March 3, 2016 AGENDA 9 Standing Committee Reports b. MRO Planning Committee Report Gayle Nansel, Chair, MRO Planning Committee To: From: Subject: Action: MRO Board of Directors Gayle Nansel, MRO Planning Committee Chair MRO Planning Committee Report Approve Special Protection System Working Group (SPSWG) Charter and Retire MRO Transmission Assessment Subcommittee (TAS) Dear Board Members: This report contains a summary of key activities and current challenges facing the committee. Detailed MRO Planning Committee (MRO PC) meeting agendas and minutes can be found at: Below is a summary of significant activities from the February 3, 2016 MRO PC meeting: 1. MRO Risk Strategy. The MRO PC discussed the Changing Resource Mix based on the Clean Power Plan (CPP) reports provided by WAPA and SPP-RTO. WAPA presented the summary of the legal basis, timeline, and outlook for the CPP including a high level overview of the rule and the challenges it as well as how those challenges will impact the state processes. SPP-RTO presented a high level of its CPP analysis. Both an individual state-by-state and regional perspective were analyzed. The SPP-RTO CPP assessment indicates a regional approach to compliance is more cost effective than a state-by-state approach and less disruptive of SPP-RTO s reliability and economic benefits. SPP-RTO is also actively engaged with State Representatives discussing State CPP plans. A final report on SPP-RTO s CPP assessment is expected to be released later this year. 2. Planning Coordinator Updates. The MRO PC discussed Planning Coordinator reporting expectations with the representatives at the meeting. The MRO PC identified lessons learned from the TPL standard as a topic of discussion at the next meeting and will request reports from each applicable Planning Coordinators. The MRO PC will also be looking to each of the Planning Coordinators to provide an update on their CPP analysis in Eastern Interconnection Modeling. The MRO representatives on the Eastern Reliability Assessment Group (ERAG) reported that NERC has developed a draft Eastern Interconnection (EI) designee letter and presented it to the EI Regional Entities for comments. The ERAG 55 of 84

56 AGENDA 9 - Standing Committee Reports under the EI REMG will act as the interim EI designee. The ERAG Multiregional Modeling Working Group consisting of Planning Coordinators (PCs) is ultimately responsible for assuring the development of the EI models. It was also emphasized that there needs to be a clear bright line between Regional Entity staff that conduct assessments and those that involved in modeling. 4. MRO Modeling Task Force (MMTF). The MMTF is nearing completion of a Planning Coordinator tie lines file that will be used to facilitate models for the EI from the Planning Coordinator model submittals. All impacted entities (Transmission Operators and Planning Coordinators) continue to participate in the development of this tie line file. This work will provide the foundation to the ERAG MMWG group in the model merge of the Planning Coordinator models. It is anticipated that the MMTF group will continue to work through the 2016 MRO Series Model Building Process continuing to coordinate and provide assistance in the transitioning the MRO Model Building Process to the Planning Coordinators in Reliability Assessment. The NERC 2016 Long-term Reliability Assessment (LTRA) data forms and associated narrative questionnaires were sent to the Regional Entities. There were no significant changes to the 2016 LTRA data request compared to previous year. However, NERC expanded on the definitions for Planned Capacity and Capacity Transfer. In addition, new for this year, the Regional Entities will be performing data validation by comparing the 2016 LTRA data (inter-area transactions, resource and demand) to the MMWG 2016 Series Models and DADS for Demand-Side Management. The effort is in conjunction with the Planning Coordinators developing the 2016 EI models for the first-time. Beginning in 2016, NERC will be doing a Short Term Reliability Assessment (STRA). The STRA will likely include one to four special assessments on current emerging issues. One of the STRA issues identified for this year is to analyze the Gas-Electric Interdependency. 6. Special Protection System Working Group (SPSWG). The MRO PC discussed the diminishing role of the MRO Transmission Assessment Subcommittee (TAS) along with the need for new group with the appropriate expertise that could be focus on reviews of special protection systems. Board action: The MRO PC respectfully requests that the board create a Special Protection System Working Group (SPSWG) to replace the existing SPS Review Team which is currently made up of members of the TAS and the Protective Relay Subcommittee, and then also retire the TAS. It is expected the SPSWG will exist for 2 to 3 years after which the fill-inthe-blank NERC standard related to SPS reviews will be assigned to the appropriate functional entities. The MRO SPSWG charter is attached for your reference. Acknowledgement: The MRO PC would like to thank the members of the MRO Transmission Assessment Subcommittee for their efforts and contributions in the development of the annual MRO Regional Contingency files used with the BES models, their participation and review of the Eastern Interconnection inter-regional assessments and their role as Subject Matter Experts on the MRO SPS Review Team. Challenges: None to report currently. 56 of 84

57 MRO SPECIAL PROTECTION SYSTEM WORKING GROUP CHARTER I. Purpose January 27, 2016 The MRO Special Protection System Working Group (SPSWG) purpose is to review new, modified, and existing special protection systems according to the requirements in NERC Standards PRC-012 and PRC-014. The SPSWG will also review the impact of removal of existing SPSs from service. The MRO SPSWG reports to the Planning Committee (PC). II. Membership Pursuant to Policy and Procedure 3 (Organizational Groups), 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. As such, the MRO SPSWG is comprised of industry experts in the areas of system protection and transmission planning. The specific experience and expertise needs of the MRO SPSWG are determined by the MRO PC. The working group shall be comprised of no more than 8 members, with 3 members with system protection expertise and 5 members with transmission planning expertise. It is preferred if one of the members represents one of the MRO Reliability Coordinators. III. Key Objectives Develop, maintain, and implement regional procedures that address the requirements of NERC PRC and TPL standards related to Special Protection Systems (SPS). Perform detailed reviews of all new and modified SPSs within the MRO Region to ensure accuracy and completeness before they are placed into service. Review the system changes that allow an existing SPS to be retired and verify that TPL performance criteria is met, as provided by the SPS Owner. Perform reviews of all existing SPSs in the MRO region every five years to ensure continued effectiveness and coordination with any other SPSs. Provide a summary report to the SPS Owner with the results of the review. Assure that the SPS owner of a new, modified, or retired SPS shares and communicates the functional aspects of the SPS with any entities that might be impacted by the SPS. Provide summary reports to the MRO Protective Relay Subcommittee (PRS), Operating Committee, and Planning Committee to inform them of the status of SPS reviews and to inform them of any new or retired SPSs. 57 of 84

58 Perform any other responsibilities as assigned by the MRO Planning Committee or Operating Committee. IV. Meetings The MRO SPSWG will meet via conference call and/or web meeting, or in person as necessary, to meet the objectives and complete the workload of the group. It is expected that the majority of meetings will be held via webex. Due to the confidential nature of SPSs, meetings of the MRO SPSWG will not be open to public attendance. 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 the MRO SPSWG members are reimbursable by MRO according to MRO Policy and Procedure 2, Expense Reimbursement. VI. Reporting Requirements The chair of the MRO SPSWG, or designate, will provide a written and/or oral report describing the activities and actions of the committee quarterly to the MRO Planning Committee. Annually, each November, the committee shall perform a review of this charter and the working group s overall purpose and key objectives to ensure that the working group is efficient and effective in its operations and according to its purpose. 58 of 84