MEETING AGENDA. MRO Board of Directors. June 21, :00 a.m. 12:30 p.m. Central. MRO Corporate Offices, King Conference Center St.

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1 MEETING AGENDA MRO Board of Directors June 21, :00 a.m. 12:30 p.m. Central MRO Corporate Offices, King Conference Center St. Paul, MN St. Peter Street #800 Saint Paul, MN P F W. MidwestReliability.org 1 of 75

2 NOTICE REQUIREMENTS - Board of Directors Meeting NOTICE REQUIREMENTS Pursuant to the Midwest Reliability Organization s ( MRO ) Bylaws, section 7.7, the Secretary is required to publish the schedule of regular board meetings to all members. This meeting is a regularly scheduled meeting of the Midwest Reliability Organization Board of Directors. Notice of this meeting was proper and the date was made available to all members in 2017 by posting the 2018 regularly scheduled board meeting dates on MRO s website calendar at: The location, precise time of the meeting, and draft agenda of items to be discussed was properly noticed to members on May 21, 2018, 30 days prior to the scheduled meeting, and was published on the MRO website. 2 of 75

3 VIDEO AND AUDIO RECORDING - Board of Directors Meeting VIDEO AND AUDIO RECORDING Please note that Midwest Reliability Organization ( MRO ) may make a video and/or an audio recording of this board of directors meeting for the purposes of making this information available to board members, members, stakeholders and the general public who are unable to attend the meeting in person. By attending this meeting, I grant MRO: 1. Permission to video and/or audio record the board meeting including me; and 2. The right to edit, use, and publish the video and/or audio recording; and 3. I understand that neither I nor my employer has any right to be compensated in connection with the video and/or audio recording or the granting of this consent. 3 of 75

4 MEETING AGENDA - Board of Directors Meeting MEETING AGENDA Board of Directors Meeting Thursday, June 21, :00 a.m. to 12:30 p.m. Central MRO Corporate Offices, Saint Paul, MN (Please note the below schedule may be adjusted real-time should items conclude early and/or extend past their scheduled end time.) AGENDA ITEM 1 Call to Order and Introductions Silvia Parada Mitchell, Board Chair 2 Determination of Quorum and Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, Vice President, General Counsel, Corporate Secretary and Director External Affairs 3 President s Report Sara Patrick, Interim President and CEO 4 Chair s Remarks Silvia Parada Mitchell, Board Chair 5 NERC Trustee Remarks Kenneth DeFontes, Jr., NERC Board Vice Chair, and Robin Manning, NERC Board member and member of NERC s Corporate Governance and Human Resource, Enterprise-Wide Risk, and Nominating Committees 6 Policy Matters Briefing on NERC Board of Trustees and Member Representative Committee May Meetings. Silvia Parada Mitchell, Chair, and Sara Patrick, Interim President and CEO 7 SPP RE Entity Transition Update Sara Patrick, Interim President and CEO 8 Consent Agenda a. Review and Approve Minutes from April 5, 2018, board meeting. b. Review and Approve Minutes from April 20, 2018, board meeting. c. Review and Approve New Organizational Group Appointments. BOARD ACTION Information Discussion Discussion Discussion Information and Discussion Information and Discussion Action Items TIME 8:00 a.m. 8:05 a.m. 8:15 a.m. 8:25 a.m. 8:55 a.m. 9:05 a.m. 9:35 a.m. *** BREAK *** 9:40 a.m. 4 of 75

5 MEETING AGENDA - Board of Directors Meeting 9 Board Committee Reports a. Hearing Body Report. Doug Johnson, Chair b. Finance and Audit Committee Report. Tom Kent, Chair Approve Resolution Appointing Baker Tilly as Independent Auditor for 2018 Financial Statements Approve Resolution Regarding the 2019 Operating and Working Capital Reserves and 2019 Business Plan and Budget c. Governance and Personnel Committee Report. Jeff Gust, Chair d. Dispute Resolution Committee Report. Tony Clark, Chair 10 MRO Operations Report Dan Schoenecker, Vice President Operations 11 Organizational Group and NERC Reports a. MRO Compliance Committee Report. Mahmood Safi, Chair NERC Compliance and Certification Committee Terry Bilke b. MRO Operating Committee Report. Ron Gunderson, Chair NERC Operating Committee (OC) Report - Dick Pursley c. MRO Planning Committee Report. Terry Torgerson, Chair NERC Planning Committee (PC) Report - Dale Burmester d. MRO Security Advisory Council (SAC) Report. Jodi Jensen, Vice Chair - NERC Critical Infrastructure Protection Committee (CIPC) Report - Marc Child e. MRO Standards Committee Report. Wayne Guttormson, Chair 12 External Affairs Report Miggie Cramblit, Vice President General Counsel Corporate Secretary and Director External Affairs Information and Action Items Information Information and Discussion Information and Discussion 10:00 a.m. 11:00 a.m. 11:10 a.m. 12:20 p.m. 13 Other Business and Adjourn Information 12:30 p.m. *** LUNCH BREAK *** 12:30 p.m. 5 of 75

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 that are self-serving or may be perceived as a conflict of interest. 4. Read the materials before board meetings and come prepared with questions. 5. Advocate why MRO is important and why it needs our support. 6. Take leadership roles by chairing a committee and knowing what the committee s responsibilities are, and initiate, as necessary. 7. Respect the different roles of staff and the board. 8. Collaborate and cooperate with other board members. 6 of 75

7 AGENDA 2 - Determination of Quorum AGENDA 2 Determination of Quorum Standards of Conduct and Anti-Trust Guidelines Miggie Cramblit, Vice President General Counsel, Corporate Secretary, and Director External Affairs 2018 Board of Directors Roster Name Sector Company Term Silvia Parada Mitchell, Chair Thomas Kent, Vice Chair Generator and/or Power Marketer Cooperative NextEra Energy December 2018 Nebraska Public Power District December 2019 Brad Cox Generator and/or Power Marketer Tenaska Power Services Co. December 2019 Chris Fleege Investor Owned Utility Minnesota Power December 2020 Doug Johnson Transmission System American Transmission Operator Company December 2020 Gordon Pietsch Cooperative Great River Energy December 2018 Iqbal Dhami Canadian Utility Saskatchewan Power December 2020 Jeffrey Gust Investor Owned Utility MidAmerican Energy Company December 2019 JoAnn Thompson Investor Owned Utility Otter Tail Power Company December 2019 Joe McGovern Investor Owned Utility Alliant Energy December 2019 Krista Tanner Transmission System Operator ITC Holdings December 2020 Larry Koshire Municipal Utility Sector Rochester Public Utilities December 2020 Lloyd Linke Federal Power Marketing Western Area Power Agency Administration December 2018 Micheline Casey Independent Director Former Chief Data Officer, Federal Entity December 2020 Dr. Paul Barber Independent Director Consultant December 2018 Ray Wahle Municipal Utility Sector Missouri River Energy Services December 2019 Richard Doying Midwest Independent Transmission System Transmission System Operator Operator December 2018 Teresa Mogensen Investor Owned Utility Xcel Energy December 2020 Tony Clark Canadian Utility Manitoba Hydro December of 75

8 AGENDA 2 - Determination of Quorum Standards of Conduct Reminder: Standards of Conduct prohibit MRO staff, committee, subcommittee, and task force members from sharing non-public transmission sensitive information with anyone who is either an affiliate merchant or could be a conduit of information to an affiliate merchant. Anti-trust Reminder: Participants in Midwest Reliability Organization meeting activities must refrain from the following when acting in their capacity as participants in Midwest Reliability Organization activities (i.e. meetings, conference calls, and informal discussions): Discussions involving pricing information; and Discussions of a participants marketing strategies; and Discussions regarding how customers and geographical areas are to be divided among competitors; and Discussions concerning the exclusion of competitors from markets; and Discussions concerning boycotting or group refusals to deal with competitors, vendors, or suppliers. 8 of 75

9 AGENDA 3 - President s Report AGENDA 3 President s Report Sara Patrick, MRO Interim President and CEO Interim President and CEO Sara Patrick will provide an oral report at the meeting. 9 of 75

10 AGENDA 4 - Chair s Remarks AGENDA 4 Chair s Remarks Silvia Parada Mitchell, MRO Board Chair Chair Parada Mitchell will provide an oral report at the meeting. 10 of 75

11 AGENDA 5 - NERC Trustees Remarks AGENDA 5 NERC Trustees Remarks Kenneth DeFontes, Jr., NERC Board Vice Chair, and Robin Manning, NERC Board member and member of NERC s Corporate Governance and Human Resource, Enterprise-Wide Risk, and Nominating Committees Kenneth W. DeFontes, Jr. NERC Vice Chair Kenneth W. DeFontes, Jr. was elected to the Board of Trustees of the North American Electric Reliability Corporation in February 2016 and was elected to vice chair in February Mr. DeFontes is the liaison to the Standards Committee and serves on the Compliance and Technology and Security Committees. Mr. DeFontes served as president and chief executive officer of Baltimore Gas and Electric Company (BGE) from 2004 to 2014, and prior to that served in a number of different positions at BGE beginning in While at BGE, he led a major transformation effort to position BGE for a fast-changing operating environment and future opportunities, implemented major investments in energy conservation, peak demand reduction and smart grid, and served as a witness in a number of regulatory matters before the Maryland Public Service Commission, as well as testifying before the Maryland General Assembly. In addition to serving on the Board of Directors of BGE, Mr. DeFontes served on the Board of ReliabiltyFirst from 2006 to 2012, and on the Boards of a number of different organizations, including the Southeastern Electricity Exchange, the American Gas Association, the Baltimore Symphony Orchestra (where he also served as chair), the Greater Baltimore Committee, and St. Joseph Medical Center. Mr. DeFontes earned a bachelor s degree in Engineering from Swarthmore College and a master's degree from Loyola College. 11 of 75

12 AGENDA 5 - NERC Trustees Remarks Robin E. Manning NERC Board member and member of NERC s Corporate Governance and Human Resource, Enterprise-Wide Risk, and Nominating Committees Robin E. Manning was elected to the Board of Trustees of the North American Electric Reliability Corporation in February Mr. Manning serves on the Corporate Governance and Human Resources, Enterprise-wide Risk, and Nominating Committees. Prior to joining the Board, Mr. Manning served as vice president of Transmission and Distribution Infrastructure for the Power Delivery and Utilization research sector at the Electric Power Research Institute (EPRI). He had overall management and technical responsibility for the annual research activities conducted by EPRI s transmission and distribution programs in collaboration with its global membership. Prior to joining EPRI, Mr. Manning served as an executive vice president with the Tennessee Valley Authority (TVA) from 2008 to 2014, where he was responsible at different times during his tenure for external relations, shared services, and power systems operations, and served as Chief Energy Delivery Officer. Previously, he had been a vice president at Duke Energy, with responsibility for power delivery and gas transmission. Mr. Manning served on the University of Houston Engineering Leadership Board and serves as immediate past president of the North Carolina State Engineering Foundation Board. He is also the president of One Heart Global Ministries, a non-profit ministry organization. Mr. Manning received a bachelor's degree in Electrical Engineering from North Carolina State University where he was recently named to the NC State Electrical and Computer Engineering Hall of Fame. He also holds a master's degree in Business Administration from Queens College in Charlotte, North Carolina. 12 of 75

13 AGENDA 6 - Policy Matters AGENDA 6 Policy Matters Briefing on NERC Board of Trustees and Member Representative Committee May meetings. Silvia Parada Mitchell, Chair and Sara Patrick, MRO Interim President and CEO Date: June 7, 2018 To: From: Subject: Action: MRO Board of Directors Chair Silvia Parada Mitchell and Sara Patrick, MRO Interim President and CEO Briefing on NERC Board of Trustees and Member Representative Committee May Meetings None Information and Discussion Dear Board Members: We will provide an oral report on the following NERC meetings that took place in May in Arlington, Virginia. a. NERC Member Representatives Committee Meeting b. NERC Board of Trustees Meeting The short meeting agendas from the open meetings are attached for your reference. The full meeting agendas, presentations, and draft minutes can be found on NERC s website. 13 of 75

14 Agenda Member Representatives Committee May 9, :00 p.m. 5:00 p.m. Eastern (Please note the Schedule may be adjusted real-time should meetings conclude early and/or extend past their scheduled end time.) The Ritz-Carlton, Pentagon City 1250 S Hayes Street Arlington, VA Conference Room: Grand Ballroom (2 nd Floor) Introduction and Chair s Remarks NERC Antitrust Compliance Guidelines and Public Announcement* Consent Agenda 1. Minutes - (Approve) a. February 7, 2018 Meeting* b. April 10, 2018 Conference Call* 2. Future Meetings* Regular Agenda 3. Remarks from FERC Commissioner Cheryl LaFleur 4. Proposed Amendments to NERC Bylaws* - (Approve) 5. Responses to the Board s Request for Policy Input* 6. Additional Policy Discussion of Key Items from Board Committee Meetings* a. Corporate Governance and Human Resources Committee b. Finance and Audit Committee c. Compliance Committee d. Technology and Security Committee 7. MRC Input and Advice on Board Agenda Items and Accompanying Materials* 8. Framework for Evaluating and Improving ERO Enterprise Effectiveness and Efficiency* 9. Standards Efficiency Review* 10. Distribution Provider Reference Document for Directly Connected Determinations* 14 of 75

15 11. Resilience Framework* 12. Technical Committee Highlights: Operating Committee* 13. Inverter-Based Resources Performance Task Force Update* Summer Reliability Assessment Preview* State of Reliability Report Preview* 16. Update on FERC Reliability Matters* 17. Accountability Matrix* 18. Regulatory Update* *Background materials included. 15 of 75 Agenda Member Representatives Committee May 9,

16 Agenda Board of Trustees May 10, :30 a.m. 12:00 p.m. Eastern (Please note the Schedule may be adjusted real-time should meetings conclude early and/or extend past their scheduled end time.) The Ritz-Carlton, Pentagon City 1250 S. Hayes Street Arlington, VA Conference Room: Ritz Carlton Grand Ballroom Call to Order NERC Antitrust Compliance Guidelines Public Announcement Introductions and Chair s Remarks Consent Agenda - Approve 1. Minutes* a. February 8, 2018 Meeting 2. Committee Membership and Charter Changes* a. Compliance and Certification Committee Membership b. Planning Committee Membership c. Planning Committee Charter Amendments d. Critical Infrastructure Protection Committee Membership Regular Agenda 3. Remarks and Reports a. Welcome Remarks Tom Farrell, Chairman, President & CEO of Dominion Energy, Inc. b. Remarks by Richard Glick, Commissioner, FERC c. Remarks by Bruce Walker, Assistant Secretary, DOE d. Remarks by Murray Doehler, Past Chair, CAMPUT e. President s Report 4. Report on Board of Trustees and Regional Board Officers Joint Meeting Information 5. Report on Board of Trustees April 17 and May 8, 2018 Closed Sessions Information 6. Board Committee Reports a. Corporate Governance and Human Resources 16 of 75

17 b. Compliance c. Finance and Audit i Audit Results and Financial Statements Accept ii. First Quarter 2018 Unaudited Statement of Activities Accept d. Enterprise-wide Risk e. Technology and Security f. Nominating Committee g. Report by Vice Chair on Standards Quarterly Activities 7. Standards Quarterly Report and Actions* a. PER Operating Personnel Credentials Approve b. PER Reliability Coordination-Staffing Retire c. Supply Chain Activities Update 8. Other Matters and Reports* a. Proposed Amendments to the Delegation Agreement with Midwest Reliability Organization Amended Exhibit B (MRO Bylaws) Approve b. Plan for Addressing Reliability Standardand Guideline Recommendations from Recent Reliability Assessments Update c. Reliability Coordinator Footprints in the Western Interconnection Update d. E-ISAC Code of Conduct Update 9. 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 i Standards Committee Strategic Work Plan Approve g. Reliability Issues Steering Committee h. Compliance and Certification Committee i. Electricity Subsector Coordinating Council 10. Forum and Group Reports* a. North American Energy Standards Board b. North American Transmission Forum Agenda Board of Trustees May 10, of 75 2

18 c. North American Generator Forum *Background materials included. Agenda Board of Trustees May 10, of 75 3

19 AGENDA 7 - SPP RE Entity Transition Update Date: June 7, 2018 AGENDA 7 SPP RE Entity Transition Update Sara Patrick, MRO Interim President and CEO To: From: Subject: Action: MRO Board of Directors Sara Patrick, MRO Interim President and CEO SPP RE Transition Update and Entity Q & A Session None - Information and Discussion Dear Board Members: We continue to maintain the rapid pace of integration of the SPP RE registered entities transitioning into MRO on July 1, Below are some highlights. Outreach The Introduction to MRO workshop held at our offices on May 22 provided registered entities with an overview of our organization and an opportunity to meet MRO staff. Attendees included 116 individuals from SPP RE registered entities in person and more than 60 participants via WebEx. An evening reception followed the workshop, providing an opportunity for staff, SPP RE entities, and MRO s Operating and Planning Committee members to network. Board members Doug Johnson and Lloyd Linke also attended the workshop and addressed attendees. Feedback from workshop participants has been very positive. I heard several compliments from attendees on the workshop content, the hospitality of our staff, and on our conference facility. The participants that I spoke to seem genuinely excited about moving to MRO and were happy to be visiting us in Saint Paul. One respondent on the workshop feedback survey said The venue was excellent and workshop content was very helpful. We met a lot of great people and are looking forward to the transition. The MRO executive team is meeting with Kansas City Power & Light (Evergy, Inc.) on June 25 at our offices in Saint Paul, and I will be attending SPP s quarterly Markets & Operations Policy Committee (MOPC) meeting in July to provide information on MRO s CMEP activities. We plan to provide representation from MRO at each quarterly MOPC meeting going forward. Additionally, MRO executive staff will visit Midwest Energy s board and senior leadership in August to provide information about MRO, at their request. 19 of 75

20 AGENDA 7 - SPP RE Entity Transition Update Governance NERC filed changes to MRO s Bylaws to accommodate representation of the expanded region on MRO s Board with FERC on June 4, The Governance and Personnel Committee has been discussing to the process for filling these new positions and will update the board during this meeting. The restructuring of MRO s organizational groups has been shared with the current stakeholder groups and was discussed at the Introduction to MRO Workshop. Jeff Gust will provide more information on the organizational group restructuring at this meeting. Additionally, we are encouraging those entities interested in participating in MRO to submit member applications now, which will be effective July 1, We have processed 15 applications to date. NERC has notified SPP RE registered entities with representation on NERC committees that their representation ends July 1. MRO NERC representatives will remain the same through the end of New MRO NERC representatives will be appointed at the board s November meeting. Data MRO is working closely with NERC and SPP RE to transition oversight activities and data from SPP RE to MRO, and to ensure a smooth transition for SPP RE registered entities. We are on schedule to receive the necessary historical SPP RE data; the last transfer of historical data is anticipated to be sent June 16. We have been participating in bi-weekly calls with SPP RE and NERC, primarily focused on the transition of data. On May 1, 2018, we executed an agreement with OATI to migrate webcdms data from SPP RE to MRO. The cutover date is anticipated to occur over the weekend of June 29-July 1, with minimal system downtime. We will provide more information to all MRO stakeholders about expected unavailability of webcdms as we get closer to the cutover date. We expect the transition will be seamless for all MRO and SPP RE webcdms users. Additional Employees So far, we have filled five of the twelve positions we added in 2018, and currently have positions posted in Compliance Monitoring, Risk Assessment & Mitigation, and Operations. Although we initially struggled to identify candidates with the requisite CIP background, we have seen an increased interest in these positions. We will continue to work diligently to identify and hire qualified candidates. We will be able to complete all required 2018 scheduled audits for MRO and SPP RE registered entities with existing staff resources. 20 of 75

21 AGENDA 7 - SPP RE Entity Transition Update Facilities We are moving forward with facility changes to accommodate more people and future growth of the organization Jess Mitchell is managing this process. Construction began on June 4 and is expected to be complete in early September. 21 of 75

22 AGENDA 8 - Consent Agenda AGENDA 8 Consent Agenda a. Review and approve Minutes from the April 5, 2018, board meeting. Jessica Mitchell, Assistant Corporate Secretary MIDWEST RELIABILITY ORGANIZATION Draft Minutes of the Board of Directors Meeting MRO Offices, St. Paul, MN April 5, :59 a.m. to 11:36 a.m. Central Time 1. Call to Order and Introductions Board Chair Silvia Parada Mitchell called the meeting to order at 7:59 a.m. and welcomed meeting attendees and guest speakers. Introductions were made. 2. Determination of Quorum, Standards of Conduct, and Anti-Trust Guidelines Vice President General Counsel, Corporate Secretary and Director External Affairs Miggie Cramblit advised that a quorum of the board of directors was present. A complete list of attendees is included as Exhibit A. Pursuant to Policy and Procedure 4, she also reminded the board of MRO s Standards of Conduct, Conflict of Interest, and Anti-Trust Guidelines. 3. Interim President s Report Interim President and CEO Sara Patrick extended a warm welcome to attendees of the first quarter MRO Board meeting, and also welcomed new director Krista Tanner from ITC Holdings, and NERC s Interim President and CEO, Charlie Berardesco. Patrick opened her remarks by reflecting on the seasonal change from winter to spring and the energizing effect this change has on those in the upper Midwest. She likened this change to the transition she experienced when she first began working at MRO, and also on the transition currently underway in the region with soon-to-be expanded MRO boundaries. Similar to the effects of spring fever, Patrick said, I am finding this new challenge both invigorating and exciting! She stated that MRO staff has made impressive progress in its efforts to transition 109 registered entities from Southwest Power Pool Regional Entity (SPP RE) to MRO. I am very proud of the MRO team and thankful for their support, as well as the support of our board and member entities, Patrick said. She closed by adding that MRO is up to this challenge, and its future looks bright. Read the full report included as Exhibit B. 4. Chair s Remarks Chair Parada Mitchell welcomed attendees to the first board meeting of the year and thanked fellow board members and meeting guests for attending and participating in the discussions. She noted this is her first meeting as chair and she thanked past chair Richard Doying for his support as she takes on this role. Parada Mitchell reflected on change, stating that it is the only certainty we have in life and we should embrace it. She quoted 22 of 75

23 AGENDA 8 - Consent Agenda Winston Churchill as saying A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty, and added that she is an optimist. Parada Mitchell noted that with the approvals of the delegation agreement and bylaw revisions, MRO and the board will soon welcome new members, and she is looking forward to this change and becoming one, larger region. She stated that the SPP RE integration provides an opportunity for MRO to assess its processes and identify areas for improvement. Although there will be challenges, she is confident that MRO is well prepared to address them. She closed by stating that in the true spirit of collaboration, she looks forward to working towards a common ERO goal, listening to each other, and agreeing on the best path for us all. Read Chair Parada Mitchell s full remarks attached as Exhibit C. 5. NERC Interim President and Chief Executive Officer Charlie Berardesco thanked the MRO Board and staff for inviting him to attend this meeting. He reflected on his position as Interim CEO, and thanked attendees for the tremendous amount of support during NERC s recent time of transition. He noted that much was accomplished during this interim time, highlighting the release of the Long- Term Reliability Assessment, a successful grid security exercise, the launch of a new E- ISAC portal, renewed engagement with Canada and Mexico, and the regional realignment following SPP RE s decision to dissolve. Regarding the realignment, Berardesco stated that the right technical decision was reached from an engineering perspective, and as a result there have been no objections to the FERC filing. He reflected on the work and initiatives that lie ahead of the ERO, and emphasized the following three points. The first is that the work we do as an ERO is important to our Nation s strategic priorities and the industry s changing landscape. The second is that the independence of NERC as the ERO is critical to the credibility of what we do, and the third is that we are all interdependent; we succeed or fail together. He highlighted the growing alignment between NERC and the Regional Entities as the boots on the ground. Berardesco concluded his remarks by stating that NERC is excited to welcome Jim Robb as its new CEO and he reviewed future NERC priorities, which include developing a framework for resilience. He responded to questions from the board. 6. Policy Matters a. Briefing on NERC Member Representatives Committee and Board of Trustees February Meetings. Sara Patrick provided highlights from the recent NERC Member Representatives Committee (MRC) and Board of Trustees meetings in Fort Lauderdale, Florida. She stated that the MRC meeting began with the election of two new members to the Board of Trustees and an update on the search for a new NERC CEO. She highlighted other meeting discussion topics, which included a presentation from the Reliability Issues Steering Committee (RISC) on its ERO Risk Priorities Report and the committee s efforts to develop a resiliency framework. The MRC also reviewed the proposed work plan for the Critical Infrastructure Protection Committee (CIPC), and Patrick stated that the CIPC intends to focus more addressing emerging risks and proactively resolving issues. 23 of 75

24 AGENDA 8 - Consent Agenda At the NERC Board meeting the following day, Patrick said the board approved an MOU that provides for information-sharing between NERC, WECC and the British Columbia Utilities Commission, and she stated that the arrangement MRO has with Saskatchewan and Manitoba include the sharing of compliance information related to NERC Reliability Standards. She highlighted the board s approval of the proposed transfer of 123 SPP RE entities to MRO and SERC, and noted that NERC has since filed the matter with FERC. Patrick reported that the next NERC Board and MRC meetings are on May 9-10 in Washington, DC. 7. Board Consent Agenda a. Review and Approve Minutes from November 30, 2017 Annual Member and Board Meeting and Annual Board-Only Meeting. b. Review and Approve New Organizational Group Appointments. c. Review and Approve PRS Charter. d. Review and Approve SAC Chair and Vice Chair. e. Approve Resolution Ratifying the establishment of the Special Oversight Committee. f. Review and Approve MRO s Revised Strategic Plan. Upon motion duly made and seconded, the board approved the consent agenda as provided in the agenda packet. 8. SPP RE Transition Update and Entity Q&A Session Sara Patrick provided an update on the status of the transition of SPP RE registered entities to MRO. She noted that NERC, MRO and SERC filed jointly with FERC on March 5, 2018, requesting an Order in early May and an effective date of July 1, She highlighted that once approved by FERC, MRO s expanded region will include more than 220 registered entities and or part of the states of Arkansas, Illinois, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wisconsin, and the Canadian provinces of Manitoba and Saskatchewan. Patrick reported that the bylaws have been revised to accommodate the expanded region, adding four new directors to the board, and that the board is currently considering changes to MRO s organizational group structure. She also noted that MRO is working closely with NERC and SPP RE on the transition and stated that staff has performed a fair amount of outreach to SPP RE registered entities that will soon be registered with MRO. This work will continue with the Introduction to MRO Workshop that is scheduled for May 22. To accommodate the additional workload, Patrick said that MRO plans to add twelve new positions in 2018, one of which has been filled, and two more positions in She opened the floor for questions about the transition. When asked what has been the most difficult or challenging part of the transition, Patrick responded that working through partially resolved issues, like enforcement actions, creates a challenge. MRO is already working with SPP RE staff to identify issues that may not be resolved by July 1, and is conducting face-to-face knowledge transfer meetings with SPP RE staff. Additionally, she said that MRO staff is participating on SPP RE 2018 audits. A 24 of 75

25 AGENDA 8 - Consent Agenda meeting attendee asked if there will be a reduction in costs for MRO entities as a result of the transition, and Patrick responded that her answer is twofold. First, the 2018 budget has already been approved and did not include transition costs. Those costs, which are estimated to be $1.5 million, and the assessments for 2018 will not change. MRO is working with NERC on how those costs will be recovered. The 2019 budget will see a reduction in assessments for all load-serving entities in the expanded footprint. A board member asked Patrick if there is any additional staffing planned for outreach, and noted that ensuring new entities understand what is required of them is integral to the transitions success. She responded that she sees outreach as the responsibility of the entire MRO team, and does not plan to add staff specifically for that purpose. She added that staff has already contacted each registered entity that is transferring to MRO, and will continue to reach out as appropriate. When asked if SPP RE and MRO will operate in parallel for a period of time as SPP RE winds down its operations, Patrick said that even though the transition effective date is scheduled for July 1, 2018, SPP RE will be dissolved as of August 31. She noted however, that MRO will have oversight responsibility as of July 1, She also responded to a question about MRO s committees, stating that MRO is in the process of looking at how best to structure its organizational groups to integrate and leverage the expertise of SPP RE entities. This topic will be addressed at the May 22 Introduction to MRO Workshop. Related to this question, an attendee asked what will happen to the entities that represent SPP RE on NERC Committees? Charlie Berardesco responded that NERC is aware of this issue and is working through possible changes. Patrick was also asked about the Multi-Region Registered Entity Program and what the impact will be for those entities where SPP RE is the lead. She responded that NERC and the Regional Entities are planning to meet in the next week to discuss the matter. SPP RE is the lead on six coordinated oversight arrangements, and the team is looking at who will be the new lead for these affected entities. She added that the entities will be notified of any changes. A question was asked about NERC s role as the Compliance Enforcement Authority (CEA) for SPP, and whether SPP would participate in MRO during this time. Patrick responded that SPP (RTO) has been a registered entity of MRO s since 2009 and recently became a member. She added that membership is not related to compliance oversight. Berardesco added the NERC will act as SPP s CEA for two years and then this arrangement will be reassessed. He sees this as an opportunity for leveraging expertise across NERC and the Regions and developing better centers of excellence around the work of the ERO. There were no further questions on the transition. The board recessed at 9:12 a.m. and reconvened at 9:30 a.m. Chair Parada Mitchell stated that the board will convene in executive session immediately before lunch. 9. Board and Committee Reports a. Hearing Body. Hearing Body Chair, Doug Johnson informed the board that the committee has not received any hearing requests or notices of contested alleged violations or proposed penalties yet in He shared that the Hearing Body met on 25 of 75

26 AGENDA 8 - Consent Agenda March 6, 2018, to approve a settlement agreement negotiated by MRO enforcement staff and noted that he recused himself from that meeting due to a conflict. Johnson provided information on the proposed revisions to the ERO Uniform Hearing Procedures, which are still pending FERC approval. He noted that NERC petitioned to further revise the procedures in February and that the MRO Hearing Body will need to make a decision later this year regarding its role. b. Finance and Audit Committee (FAC). FAC Chair Tom Kent, drew the board s attention to the report provided in the agenda materials and reviewed both the 2017 unaudited and the year-to-date financials. He reported that at the conclusion of the external financial audit there was an adjustment due to MRO s postretirement medical plan based on the actuarial report. Regarding the 2018 budget, Kent stated the committee discussed the impacts of the SPP RE transition and options for recovering those costs, which is estimated to be $1.5 million. Staff feels the most likely option will be to transfer SPP RE assessment funds to MRO in the third quarter and rely on MRO reserves, if necessary. Kent reported that the FAC also heard reports from the Investment Committee and MRO s Investment Advisor at its last meeting, and he provided a brief summary of those reports. He concluded by noting that the development of the 2019 Business Plan and Budget is underway and reminded the board of the budget review call scheduled on April 20, c. Governance and Personnel Committee (GPC). GPC Chair Jeff Gust highlighted the recent activities of the GPC. He stated that the committee has met three time in 2018 and is recommending a change in independent director compensation for 2019, noting the revised compensation was a handout. Gust stated the committee reviewed compensation paid by other Regional Entities to determine the appropriate adjustment, and he called for a motion to approve these changes. Upon motion duly made and seconded, the board approved the revisions to MRO s Independent Director Fee Schedule to be effective January 1, 2019, as presented. Independent board directors Dr. Paul Barber and Micheline Casey abstained from voting. Gust concluded his report by stating that the GPC also reviewed several administrative items with staff, which included the results of the 2017 Stakeholder Survey. He noted that the survey results are very positive and were included in the materials for this meeting. The committee also has action items from the board s self-assessment, which include increased board communication with stakeholders and ensuring staff succession plans are in place. He closed his report by stating the committee reviewed MRO s revised Strategic Plan. Chair Parada Mitchell added that the revised plan is very well aligned with the ERO s Long-Term Strategy and Operating Plan. d. Dispute Resolution Committee (DRC). DRC Chair Tony Clark reported that the DRC has not received any notices of disputes and has not met since the last board meeting. 26 of 75

27 AGENDA 8 - Consent Agenda He added that the committee will undertake its review of the DRC procedures in the September timeframe. Chair Parada Mitchell moved the following reports ahead on the agenda. 10. MRO Operations Report a. Event Analysis Report. MRO Vice President Operations Dan Schoenecker drew the board s attention to the report in the agenda materials and briefly reviewed new events in the region since the last board meeting. He noted the new events were all category one events, which continues a positive, low-impact trend in the region. He reviewed regional event trends, highlighting a steady drop in the impact of events on the bulk power system. Schoenecker also noted that although misoperations continue to be a contributing factor of events, the number of misoperations is declining. He attributes that reduction to the work MRO has done to communicate lessons learned and best practices related to misoperations throughout the region. Schoenecker concluded his report by encouraging participation in MRO s Spring Reliability Conference scheduled on May 23, A board member asked if the region is doing enough to share lessons learned about cybersecurity breaches and threats. Vice President Risk Assessment, Mitigation and Standards Richard Burt stated that lessons learned from cybersecurity events are widely distributed to industry through the Electricity Information Sharing and Analysis Center (E-ISAC), and he urged entities to seek out this information. Security and Mitigation Principal Steen Fjalstad clarified that an organization can have multiple E-ISAC accounts and that this practice is encouraged. He also agreed that the MRO Security Advisory Council, which is tasked with providing security outreach to the region, can assess these efforts. Schoenecker responded to a question regarding NERC s misoperations database, MIDAS, and efforts related to improving the database. 11. Organizational Group Reports The following are highlights from the organizational group reports provided to the board by the organizational group chairs. The full reports are in the meeting agenda packet on MRO s website. a. Compliance Committee (MRO CC) Report. MRO CC Chair Mahmood Safi (Omaha Public Power District) reviewed the recent activities of the MRO CC and its subcommittee with the board. He highlighted a survey of MRO s primary compliance contacts that indicated a need for outreach on developing internal controls and selflogging, and noted the results indicated that entities are satisfied with guided selfcertifications and MRO s Inherent Risk Assessment and Compliance Oversight Plan processes. He stated that the committee continues to develop its work plan for 2018, and he responded to questions from the board, noting that the committee is working with staff on a self-logging webinar. 27 of 75

28 AGENDA 8 - Consent Agenda Terry Bilke, MRO s representative on the NERC Compliance and Certification Committee (NERC CCC), provided a report on the recent activities of the NERC CCC and its subgroups. He highlighted work related to the CMEP technology project, noting the project provides value from a consistency standpoint and for registered entities. Bilke reported that the 2018 ERO Enterprise Survey is under development and will be issued in August, and noted the CCC is providing outreach to industry on the survey to encourage participation. He responded to a question regarding the CCC s role as a hearing body in appeals cases where NERC is the compliance enforcement authority. b. Operating Committee (MRO OC) Report. MRO OC Vice Chair Nicholas Giffin (American Transmission Company) reviewed the recent activities of the MRO OC and its subcommittee, the Protective Relay Subcommittee (PRS). He stated that regional Reliability Coordinators continue to attend MRO OC meetings to provide quarterly performance reports. He highlighted that SaskPower hit peak demand this winter, and that both MISO and SPP set new wind output records. He stated that the MRO OC is providing input on agenda topics and presentations for MRO s Spring Reliability Conference, and stated that the PRS is working with the MRO Standards Committee to develop a Standard Application Guide for PRC-002. He concluded by providing information on the committee s coordination with the NERC Operating Committee on different initiatives related to circuit breaker failure modes, remedial action schemes and distributed energy resources. Giffin responded to questions from the board. Dick Pursley, MRO s representative on the NERC Operating Committee (NERC OC), provided a report on the recent activities of the NERC OC and its subgroups. He highlighted activities related to essential reliability services and the changing resource mix, and noted an upcoming FERC technical conference on distributed energy resources. He also reported that NERC plans to publish an alert on bulk power systemconnected inverter resources, and is planning industry guidance and outreach on the topic. Pursley reviewed the NERC OC s coordination efforts with other industry participants on important reliability topics, and stated that the NERC OC continues to review lessons learned at each meeting. In response to a question, Pursley provided his insight on possible duplication between regional and NERC committees, noting that regional committees address issues specific to the region. Charlie Berardesco added that there is a desire to create more efficiencies among the different organizational groups and NERC is reviewing its committee structure. c. Planning Committee (MRO PC) and NERC Planning Committee (PC) Reports. Dan Schoenecker stated that neither the MRO PC nor the NERC PC representatives could attend this meeting. He drew the board s attention to the reports provided in the agenda packet and called for questions. MRO Manager of Reliability Assessments and Performance Analysis Salva Andiappan responded to a question on the activities related to Geomagnetic Disturbances. Berardesco added that he anticipates more robust oversight of industry s preparedness for Geomagnetic Disturbances. Micheline Casey departed the meeting during the MRO PC report. 28 of 75

29 AGENDA 8 - Consent Agenda d. MRO Security Advisory Council (MRO SAC) Report. MRO SAC Vice Chair Jodi Jensen (WAPA) reviewed recent activities of the MRO SAC. She highlighted a weekly information-sharing threat call the MRO SAC recently implemented, and noted that feedback on this initiative is very positive. Jensen described recent ICS SCADA training sponsored by the DHS and hosted by MRO, stating that it was extremely well received. She credited MRO staff for bringing this kind of training to registered entities in the region and noted the MRO SAC is exploring future training options. She reviewed the council s security outreach efforts, which includes several planned webinars, the Annual Security Conference, and articles published in MRO s newsletter. Jensen concluded by highlighting MRO s regional security risk assessment, a regional security contact list developed to provide information to the region more efficiently, and coordination efforts with the E-ISAC and NERC CIPC on various security initiatives. In response to a question, Steen Fjalstad provided his insights on the designbasis threat and ways to improve an organization s response. Marc Child (Great River Energy) MRO s representative on the NERC CIPC provided a report on recent CIPC activities. He highlighted a shift in the CIPC s focus towards developing deliverables that directly address risks, and noted CIPC efforts related to supply chain security and the utilization of cloud computing. He also reported that the CIPC has a representative on the RISC, and as the RISC works to define resiliency, the CIPC will consider how cybersecurity fits into this definition. Child responded to questions from the board, and provided more detail on the activities of the Security Metrics Working Group. e. Standards Committee (MRO SC) Report. Chair of the MRO SC Wayne Guttormson (SaskPower) provided a report on the recent activities of the MRO SC and the NERC Standards Review Forum (NSRF). He stated that the MRO SC is considering application guidance on several NERC Standards, and reported that a Subject Matter Expert Team has been established to develop guidance on PRC Disturbance Monitoring and Reporting Requirements. Guttormson described NERC Standards Efficiency Review team efforts, noting there is MRO representation on these teams. He concluded his report by highlighting topics under review by the NSRF, which continues to provide comments to NERC that are very well received. Guttormson responded to questions, and provided the status of supply chain Reliability Standards still pending FERC approval. Tom Kent departed the meeting briefly and returned. Micheline Casey rejoined the meeting at 11:15 a.m. 12. Independent Auditor Report Nicki Donlon and David Kelley from the audit firm Baker Tilly provided the independent auditor report to the board. Kelley reviewed the audit process, noting that the cooperation of MRO staff was very good and the audit went smoothly. He stated that there were no journal entries or unrecorded misstatements as part of the audit process, and that the financial statements fairly represent Generally Accepted Accounting Principles (GAAP). 29 of 75

30 AGENDA 8 - Consent Agenda Kelley reviewed required audit communications with management and the board, and stated that the audit results provide reasonable, but not absolute, assurance that the financial statements are free of material misstatement. Kelley also noted that Baker Tilly tested MRO s internal controls, but does not provide assurance that the controls are sufficient. He added that based on this testing, he is comfortable with the controls MRO has in place. Kelley stated that the audit was straightforward and there were no new, or revisions to existing, accounting policies and no unusual transactions. He noted that Baker Tilly worked with Deloitte to review actuarial estimates related to MRO s post retirement plan and MRO s obligations related to the plan, and emphasized Baker Tilly s independence from other non-audit services provided to MRO. Kelley concluded by reporting that Baker Tilly conducted fraud interviews with MRO staff, and based on these interviews they have no fraud or ethics concerns. Donlon reviewed the draft audited financial statements, noting a change in unrestricted net assets related to funding MRO s postretirement medical trust. She noted that during the audit review and testing process, the auditors focused on the post-retirement medical plan and requested additional documentation from Deloitte, MRO s actuary, to review. Based on this review, Baker Tilly is comfortable with the change in net assets. Donlon also reported that Baker Tilly had no concerns with MRO s cash flow statement, and noted that the audit team reviewed the individual invoices from MRO s remodel to verify those expenses. She stated the audit team reviewed subsequent events with the changes to the delegation agreement and the reassignment of 109 new entities. She highlighted no significant changes to the disclosures, and no significant actions that would require new disclosures. Donlon concluded her report by stating that the financial audit resulted in a clean, unmodified opinion, which is the highest opinion an organization can receive. Accountant and HR Specialist Regina Davis informed the board that the audit report will be finalized and posted to MRO s website following board acceptance. Upon motion duly made and seconded, the board accepted the draft independent audit report of MRO s 2017 financials as presented by Baker Tilly, subject to no material changes in the final report. 13. External Affairs Report Miggie Cramblit reported that MRO is meeting in May with Canadian Regulators at CAMPUT, and similarly, with the Mid-America Regulatory Conference (MARC) in the U.S. She highlighted that all of the MARC states, except for Indiana a will be in MRO s expanded footprint, and noted that periodically MRO staff receives requests for assistance from state regulators. She noted a recent request from the Minnesota Public Utilities Commission Executive Director on a matter pertaining to Geomagnetic Disturbances, which she redirected to John Moura at NERC. Cramblit closed by stating that MRO and NERC staff will meet with FERC Commissioners and staff in the fall to provide an update on the SPP RE transition. 30 of 75

31 AGENDA 8 - Consent Agenda 14. Other Business and Adjourn Having no further business to discuss, the meeting adjourned at 11:36 a.m. The board convened in a closed, executive session. A complete list of decisions from this meeting is attached as Exhibit D. Presentations and handouts from this meeting are available 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 31 of 75

32 AGENDA 8 - Consent Agenda Exhibit A Meeting Attendees Board Members Present Silvia Parada Mitchell NextEra Energy, Chair Tom Kent Nebraska Public Power District, Vice Chair Brad Cox Tenaska Power Services Chris Fleege Minnesota Power Doug Johnson American Transmission Company Gordon Pietsch Great River Energy Iqbal Dhami SaskPower Jeffrey Gust MidAmerican Energy Company JoAnn Thompson Otter Tail Power Company Krista Tanner ITC Midwest Larry Koshire Rochester Public Utilities Lloyd Linke Western Area Power Administration Micheline Casey Independent Director Dr. Paul Barber Independent Director Richard Doying MISO Teresa Mogensen Xcel Energy Tony Clark Manitoba Hydro Board Members Not Present Joe McGovern Alliant Energy Ray Wahle Missouri River Energy Services MRO Staff Carolina Margaría Administrative Assistant Dan Schoenecker Vice President Operations Desirée Sawyer Compliance Administrator Jessica Mitchell Assistant Corporate Secretary Ken Gartner CMEP Process Principal Vice President General Counsel, Corporate Secretary and Director Miggie Cramblit External Affairs Mike Bocovich Principal Protection Systems Engineer Regina Davis Accountant and HR Generalist Richard Burt Vice President Risk Assessment, Mitigation, and Standards Russ Mountjoy Standards, Certification and Registration Manager Salva Andiappan Manager Reliability Assessments and Performance Analysis Sara Patrick Interim President and CEO Steen Fjalstad Risk Assessment and Mitigation Principal Sue Clarke Vice President Finance and Administration Val Agnew Vice President Enforcement Guests: Brian Tulloh MISO Charlie Berardesco Interim NERC President and CEO Darrell Piatt FERC Staff David Kelley Baker Thilly Dick Pursley Great River Energy 32 of 75

33 AGENDA 8 - Consent Agenda Jennifer Flandermeyer Jodi Jenson Joe DePoorter Joe Lang Larry Heckert Lori Spence Mahmood Safi Marc Child Nick Giffin Nicki Donlon Terry Bilke Thad Ness Tracey Stewart Troy Brumfield Wayne Guttormson Yee Chou Kansas City Power & Light Western Area Power Administration Madison Gas & Electric Omaha Public Power District Alliant Energy MISO Omaha Public Power District Great River Energy American Transmission Company Baker Thilly MISO Xcel Energy Southwestern Power Administration American Transmission Company SaskPower American Electric Power 33 of 75

34 AGENDA 8 - Consent Agenda Exhibit B Interim President s Report Sara Patrick Good morning. I d like to begin by welcoming each of you to our first board meeting of the year. A special welcome to our newest director, Krista Tanner from ITC. Krista is the Vice President of ITC Holdings Corporation and the President of ITC Midwest. In addition to providing leadership and strategic direction for ITC Midwest, she has several years of experience in directing regional and federal regulatory policies and we look forward to her participation on the board. I d also like to welcome Charlie Berardesco from NERC. Charlie has been serving as NERC s Interim President and CEO since November last year, and has been working closely with us on the transition of SPP RE registered entities. Given the topics on today s agenda, I d like to thank Charlie for attending this meeting and look forward to his insight and feedback. Most importantly, I would like to recognize and welcome those who represent registered entities who will become a part of MRO on July 1, pending FERC approval. Representatives from American Electric Power, Kansas City Power & Light, and Southwestern Power Administration are here. I was hoping it would it would finally begin to feel a bit like spring here in Minnesota though the sun is feeling warmer, the birds are singing louder, and the days are longer and while the snow lingers now, soon the flowers will be in bloom and the trees will leaf out. For us, this seasonal transition is a major one a rebirth of sorts. In spring, flowers start blooming, and people come out in droves to enjoy a welcome change in the weather. In fact, there were people running in the park across the street in shorts last week. (A little crazy, maybe...) For Minnesotans, the transition from winter to spring is eagerly anticipated for its promise of renewal! I experienced a similar transition when I first joined MRO nearly ten years ago when mandatory regulation was in its infancy, creating both incredible challenges and opportunities. FERC had just issued its first Notice of Penalty (NOP) Order on July 3, 2008, and provided some pretty lengthy direction on what to include in enforcement determinations going forward. It was a steep learning curve, but one that provided the opportunity for MRO to help shape policy and impact the enforcement processes for our industry across North America. I have been incredibly fortunate to have had a part of the process from the early days, to have watched it evolve, and to have helped nurture it through to maturity. And now, we at MRO find ourselves facing perhaps the most significant change since mandatory compliance became effective. We are preparing to expand our geographic boundaries--essentially doubling our size and responsibilities--as a result of the dissolution of the Southwest Power Pool Regional Entity. The NERC Board of Trustees approved the matter in February and it is now pending FERC approval. 34 of 75

35 AGENDA 8 - Consent Agenda Once again, I find myself in an exciting period of transition, this time leading the efforts to integrate 109 registered entities into the MRO region. Similar to the seasonal effects of Spring Fever, I am finding this challenge both invigorating and exciting! The progress that the MRO team has made in just under two months since the NERC Board s approval, is impressive. You will hear more about our efforts related to the transition during this meeting, I would like to highlight some of those efforts. Each registered entity that will become a part of MRO has been contacted by a staff member to welcome the entity and solicit any questions. We are responding to each person who asked a question on our call or through our transitions . From those questions we have created a list of FAQs that will be published on the dedicated web page we set up for SPP RE registered entities. Dan Schoenecker, Julies Sikes and Michael Taube and I had an opportunity to attend the SPP RE Spring Workshop and meet entities and answer questions last week. And at the end of the week Dan and I we were joined by Ken McIntyre from NERC, Richard Burt and Miggie Cramblit for a very good meeting with SPP RTO leadership as part of the meetings we have been doing one-on-one with entities. In May we have an Introduction to MRO Workshop and Reception and to date over 130 individuals have registered for the event. I can tell you that the responses we ve received from entities transitioning to MRO are very positive. We are also hard at work on the transition of data. That too is going very well. I attribute this to our focus on the task from our board s Oversight Committee to our talented and skilled staff. So many staff members have demonstrated their devotion to our shared success, either through tackling their existing tasks with renewed vigor, knowing that more is headed our way, or through taking on additional responsibilities to assist with the integration efforts. I am very proud of the MRO team and thankful for their support, as well as the support of our board and member entities. William Bridges said It is when we are in transition, that we are completely alive. Just as we welcome and look forward to the transition from winter to spring each year, we are finding this new chapter in our story incredibly invigorating and exciting. And we are up for the challenge! Our future looks bright. Thank you. 35 of 75

36 AGENDA 8 - Consent Agenda Exhibit C Chair s Remarks Silvia Parada Mitchell, Chair Good morning everyone and welcome to MRO s first Board meeting of It is nice to be back in St. Paul and seeing everyone, although this is somewhat cooler spring weather than I am used to in Florida, about 60 degrees cooler. Of course, in June, I will be very appreciative of this cooler weather. A special welcome to our new board member Krista Tanner of ITC, our presenters, SPP RE entities who are joining us today, and our special guest, Charlie Berardesco, interim President and CEO of NERC. This is my first meeting as chair and I would like to take this opportunity to thank Richard Doying for his leadership as chair over the last two years and for his support as I take on the role. While preparing my remarks for this first meeting, I realized the start of my term has closely followed my own career pattern. That is, taking on new assignments that bring several unexpected changes and interesting challenges. Very quickly I was reminded that change is the only certainty in life, and as such we need to embrace it and thrive with the opportunities it usually brings. Winston Churchill said A pessimist sees difficulty in every opportunity; an optimist sees the opportunity in every difficulty. Thus, as the optimist that I am, I see 2018 as a year full of opportunities for MRO. Already we have seen a productive first quarter. In February, the NERC Board of Trustees approved the expansion of MRO s regional boundaries and soon we should expect to receive FERC s approval. The MRO team has been working closely with SPP RE on the transition of entities. The MRO members have approved the proposed By-laws changes; and at the board we have been working with MRO staff to help ensure a successful transition. These changes will help us grown, obtain new perspective and give us the opportunity to revisit existing processes, breaking old habits or patterns, looking at our work with fresh eyes and finding improvements that benefit all existing and soon to be new MRO members. While there will be challenges, I believe we are well positioned to address them and in the end have a region that fully supports all its stakeholders. In addition to the SPP entities transition, in 2018 we will also continue to work closely across the ERO and with industry on ongoing and new initiatives such as the Standards Efficiency Review, CIP V5 compliance and the transition to the ERO single portal. In the true spirit of collaboration, together with Tom Kent, our new Vice Chair, and all the MRO Board Directors, I look forward to working towards a common ERO goal, listening to each other s views and agreeing on a path that we all follow. As one old 80 s songs says The future is so bright, I gotta wear shades. Thank you. 36 of 75

37 AGENDA 8 - Consent Agenda Exhibit D Decision List April 5, 2018 AGENDA ITEM 7. Board Consent Agenda DECISION a. Review and Approve Minutes from November 30, 2017 Annual Member and Board Meeting and Annual Board-Only Meeting. b. Review and Approve New Organizational Group Appointments. c. Review and Approve PRS Charter. d. Review and Approve SAC Chair and Vice Chair. e. Approve Resolution Ratifying the establishment of the Special Oversight Committee. f. Review and Approve MRO s Revised Strategic Plan. Upon motion duly made and seconded, the board approved the consent agenda as provided in the agenda packet. 9. Board Reports c. Governance and Personnel Committee (GPC). Approve a change in independent director compensation for 2019, as provided in the handout. Upon motion duly made and seconded, the board approved the revisions to MRO s Independent Director Fee Schedule to be effective January 1, 2019, as presented. 10. Independent Auditor Report Upon motion duly made and seconded, the board accepted the draft independent audit report of MRO s 2017 financials as presented by Baker Tilly, subject to no material changes in the final report. 37 of 75

38 AGENDA 8 - Consent Agenda AGENDA 8 Consent Agenda b. Review and approve Minutes from the April 20, 2018, board meeting. Jessica Mitchell, Assistant Corporate Secretary MIDWEST RELIABILITY ORGANIZATION Draft Minutes of the Board of Directors Web Meeting WebEx - April 20, :01 a.m. to 11:10 a.m. Central 15. Call to Order and Introductions Board Chair Silvia Parada Mitchell called the meeting to order at 10:01 a.m. 16. Determination of Quorum, Standards of Conduct, and Anti-Trust Guidelines A roll call was taken and Assistant Corporate Secretary Jessica Mitchell advised that a quorum of the board of directors was present. She asked if there were any other persons on the call; there were none. She introduced MRO staff present on the call and reminded the board that this call is open to public attendance. A complete list of attendees is included as Exhibit A. Pursuant to Policy and Procedure 4, Vice President General Counsel and Director External Affairs reminded the board of MRO s Standards of Conduct, Conflict of Interest and Anti-Trust Guidelines. 17. Review Draft 2018 Business Plan and Budget Interim President and CEO Sara Patrick thanked board members for attending the meeting and stated that Vice President Finance and Administration Sue Clarke would review the presentation provided in the meeting materials. Sue Clarke stated that the Finance and Audit Committee (FAC) recently reviewed the draft 2019 Business Plan and Budget and noted that recommendations from the FAC had been incorporated into the presentation provided at this meeting. She stated that the draft budget reflects an overall increase of $2.8 million or 21 percent from the 2018 projected budget and includes the oversight work transferred to MRO from the dissolution of the SPP Regional Entity (SPP RE). Clarke noted she used the projected 2018 budget to make her comparisons and not the board-approved 2018 budget, which did not include any costs related to the SPP RE entity transition. She noted that the total assessments will increase by $4.8 million for the expanded region and the assessment per Net Energy for Load (NEL) charged to load-serving entities will decrease in Clarke reported that the estimated $1.5 million in transition-related costs will likely be recovered using SPP RE assessment funding that would be transferred to MRO. She noted that SPP s first quarter treasurer s report projects $4.8 million in unused assessments at the end of Board member Doug Johnson joined the meeting in progress. 38 of 75

39 AGENDA 8 - Consent Agenda In response to a question, Patrick clarified that the estimated $1.5 million is a one-time cost in 2018, and noted that some of these costs are ongoing and are reflected in the draft 2019 Business Plan and Budget. The board discussed the assessments from SPP RE in excess of the $1.5 million and Clarke stated that how those funds will be addressed is still under discussion. She also noted that SPP RE is still in the early stages of winding down its operations and that the projected unused assessment figure is an estimate. Upon discussion of the year-over-year budget comparisons, the board recommended that staff compare the draft 2019 budget to the board-approved 2018 budget instead of the projected 2018 budget. The board also suggested staff revise the presentation to add additional decimal places to the assessment figures to ensure greater accuracy and more transparently reflect the NEL savings that both MRO and SPP RE entities will see in 2019 as a result of the transition. Clarke reported that full-time equivalents (FTEs) will increase from 45 now to 59 in 2019, and stated that staff plans to reassess resources in In response to a question, Patrick stated that SERC is in the process of comparing resources across the Regional Entities and has shared some information with MRO. Based on early data provided by SERC, MRO is providing more audits per auditor when compared to the other Regional Entities. SERC has agreed to share the information it collects with MRO once it has completed its review. Clarke reviewed three priorities staff has set for 2019, which are to integrate new registered entities into MRO, to execute NERC delegated functions for the expanded footprint, and to align MRO with the ERO Enterprise in support of a common vision and mission. Patrick provided more detail on these priorities and added that while much of this work involves new registered entities, MRO will continue the commitments it has with existing registered entities. A board member suggested that MRO depict SPP RE s 2018 budget and assessments to the year-over-year budget comparison. Clarke responded that she will revise the comparison slides to highlight the economic advantages of a larger, more efficient region. She then reviewed the budget development process, stating that final approval of the budget will take place at the board s June meeting and the budget will subsequently be submitted to NERC and then to FERC for approval. Patrick highlighted that the additional staff proposed in the 2019 budget is not proportional to the increase in the number of registered entities. She stated that while additional travel may be required for oversight activities and outreach, staff will continue looking for ways to work smarter and be more efficient. She also noted that the 2019 budget includes the use of contractors and consultants as a safeguard. She acknowledged that employee costs were not backed out when additional contractor and consultant costs were added to the budget, noting that it will take time to set a new budget norm. In response to a question, Patrick stated that she only anticipates one remote employee in Arkansas. Clarke reviewed risks to the 2019 budget and highlighted budget assumptions. She stated that MRO performed a compensation study in 2016 and is planning another study in She also provided information on MRO s year-end employee review process, noting that salary increases are based on performance and that the amount included in the budget is the average salary increases for all employees. When asked if MRO s facilities can 39 of 75

40 AGENDA 8 - Consent Agenda accommodate the additional staff, Patrick stated that a facility remodel is included in the transition cost estimate. Clarke reviewed the key aspects of funding, and a board member highlighted that the NEL savings reflect the efficiencies of a larger organization. The board recommended that MRO review the NEL calculations with each registered entity as it did in 2016, and Patrick stated that NERC is aware of the need for an ERO-wide NEL review. Clarke reviewed provisions in Policy and Procedure 13 (Operating and Working Capital Reserves), noting that anticipating what is necessary for reserves is more of an art than a science. She stated that currently the board has approved 30 days of reserves, and reminded the board that MRO resets its reserves at the start of each year following a comprehensive financial review. Clarke also reviewed provisions in Policy and Procedure 12 (General Finance) related to retiree medical plan funding, and she reviewed year-over-year comparisons between 2016 and She then reviewed MRO s cash management processes and when MRO would use its reserves and line of credit, if necessary. When reviewing impacts to assessments as a result of the transition, a board member recommended that MRO work closely with NERC on how SPP RE entity assessments will be allocated and used in 2018 to ensure fair disbursement and use of these funds. Board members Jeff Gust and Micheline Casey departed the meeting at 11:00 a.m. Clarke reviewed two tables containing year-over-year cost comparisons by program area, both with and without the estimated transition costs. She agreed to simplify this information in the final presentation provided to MRO members for comment. She closed by reviewing the allocation of additional resources by program area and responded to questions from the board. Patrick added that she is confident that the draft 2019 budget will allow MRO to perform its CMEP oversight responsibilities with the requisite independence and segregation of duties required. She again thanked board members for attending this meeting and stated that she appreciates the comments and attention to detail provided by board members today. 18. Other Business No other business was brought before the board. 19. Adjourn Having no further business to discuss, the meeting was adjourned at 11:10 a.m. Prepared by: Reviewed and submitted by: Jessica Mitchell, Assistant Corporate Secretary Miggie E. Cramblit, Vice President General Counsel, Corporate Secretary and Director of External Affairs 40 of 75

41 AGENDA 8 - Exhibit A Meeting Attendees Exhibit A Meeting Attendees Board Members Present Silvia Parada Mitchell, Chair NextEra Energy Brad Cox Tenaska Power Services Chris Fleege Minnesota Power Doug Johnson American Transmission Company Gordon Pietsch Great River Energy Jeffrey Gust MidAmerican Energy Company JoAnn Thompson Otter Tail Power Company Joe McGovern Alliant Energy Krista Tanner ITC Midwest Larry Koshire Rochester Public Utilities Lloyd Linke Western Area Power Administration Micheline Casey Independent Director Dr. Paul Barber Independent Director Ray Wahle Missouri River Energy Services Teresa Mogensen Xcel Energy Board Members Not Present Iqbal Dhami SaskPower Richard Doying MISO Thomas Kent, Vice Chair Nebraska Public Power District Tony Clark Manitoba Hydro MRO Staff Carolina Margaria Administrative Assistant Jessica Mitchell Assistant Corporate Secretary Lisa Stellmaker Operations Administrator Vice President General Counsel, Corporate Secretary and Director Miggie Cramblit External Affairs Regina Davis Accountant and HR Generalist Sara Patrick Interim President and CEO Sue Clarke Vice President Finance and Administration Val Agnew Vice President Enforcement 41 of 75

42 AGENDA 8 - Consent Agenda AGENDA 8 Consent Agenda c. Review and Approve New Organizational Group Appointments. Jessica Mitchell, Assistant Corporate Secretary Date: June 7, 2018 To: From: Subject: Action: MRO Board of Directors Jessica Mitchell, Assistant Corporate Secretary Review and Approve New Organizational Group Appointments Approve Organizational Group Appointments Dear Board Members: Since the last board meeting, the following individuals have been elected by an industry sector or approved by the appropriate committee to serve on an MRO organizational group or NERC committees or working groups. Staff respectfully requests board approval on these appointments. Formation of new PRC Subject Matter Expert Team Previously, the MRO Standards Committee (MRO SC) reported a request for a Standard Application Guide (SAG) for PRC Disturbance Monitoring and Reporting Requirements, R4.3 to address trigger settings for at least neutral (residual) overcurrent, and phase undervoltage or overcurrent conditions. These conditions could cause excessive event triggering and result in the loss of meaningful System transient event records, due to exceeding the event logging capabilities of a Fault Recording device. The MRO SC approved the request and MRO held a special election for a PRC Subject Matter Expert Team (SMET) for the development of the SAG and respectfully requests board approval for the Subject Matter Expert Team and its appointments. PRC Subject Matter Expert Team o Kenneth Koel, Western Area Power Administration, Term ending December 31, 2020 o Todd Lawson, Alliant Energy, Term ending December 31, 2020 o Dejan Leginovic, Great River Energy, Term ending December 31, 2020 o Randy Pynenberg, American Transmission Company, Term ending December 31, 2020 o Christopher D. Roemmich, Basin Electric Power Cooperative, Term ending December 31, 2020 o Stan Toews, Manitoba Hydro, Term ending December 31, 2020 o Joe Knight, Great River Energy, Term ending December 31, of 75

43 AGENDA 9 - Board Committee Reports AGENDA 9 Board Committee Reports a. Hearing Body Report Doug Johnson, Chair Date: June 7, 2018 To: From: Subject: Action: MRO Board of Directors Doug Johnson, Hearing Body Chair Hearing Body Report None - Information and Discussion Dear Board Members: The Hearing Body meets as needed throughout the year to consider contested violations and approve Settlement Agreements negotiated by MRO Enforcement staff. The full meeting agendas and associated documents can be found on the MRO confidential board site in the Settlement section of the Hearing Body page. MRO has not received any requests for hearings or notices contesting alleged violations or proposed penalties so far in Summary of Discussion Items and Committee Actions: 1. On February 27, 2018, NERC amended its December 9, 2016 petition requesting approval of proposed revisions to the NERC Rules of Procedure related to the Hearing Procedures. NERC s December 2016 Petition proposed revisions to the ROP that incorporate the Consolidated Hearing Process, which would provide Regional Entities an option to select NERC to manage the hearing process. The amendment addresses FERC staff questions relating to the Hearing Officer having the ability to cast the deciding vote in the event of a tie by proposing five members instead of four, and consistency in the use of terms by proposing replacing the term segment with the term sector. The February 2018 amendment was filed following a public comment period that ended on January 14, 2018 and NERC Board of Trustee approval at its February meeting. A copy of the petition is available here. 2. On June 20, 2018, the MRO Hearing Body is scheduled to meet to discuss the pending FERC approval of the Consolidated Hearing Process and to develop a plan for necessary MRO Hearing Body actions. The actions to be discussed include: a. Request to the MRO Board to adopt the NERC Consolidated Hearing Process as described in NERC s December 2016 Petition and February 2018 Amendment. b. Request to the GPC to recommend the board dissolve the MRO Hearing Body. c. Process to select and compensate MRO Hearing Body members. 43 of 75

44 AGENDA 9 - Board Committee Reports Action Items for Consideration by the MRO Board of Directors: There are no action items at this time 44 of 75

45 AGENDA 9 - Board Committee Reports AGENDA 9 Board Committee Reports b. Finance and Audit Committee Report. Tom Kent, Chair Date: June 7, 2018 To: From: Subject: MRO Board of Directors Tom Kent, Finance and Audit Committee Chair Finance and Audit Committee Report Action: Approve Baker Tilly as independent auditor for Approve the MRO 2019 Operating and Working Capital Reserves, Retiree Medical Funding, and Business Plan and Budget. Dear Board Members: The Finance and Audit Committee (FAC) met on May 3, The following is a summary of items discussed and actions taken by the committee at this meeting. The full meeting agenda can be found on the confidential board site here: Summary of Discussion Items and Committee Actions: 1. MRO staff stated MRO was over budget by $314K (11.8 percent) in the first quarter, primarily attributable to personnel costs being over budget due to organization changes. Staff expects to be over budget an additional $1.5M (12.8 percent) at year-end due to the SPP RE transition; however, the transition costs are expected to be funded through a transfer of SPP RE assessments. Click here to view the first quarter 2018 Unaudited Statement of Activities. Staff informed the FAC that while the GAAP report is no longer provided in the NERC quarterly filing, it will continue to be provided to the FAC, given it is useful information to document MRO s financials on a GAAP basis. Staff also noted that the balance sheet report had no unusual changes. 2. Staff provided the committee with the audit task checklist, which includes a review of Baker Tilly, the independent auditor. In general, staff was satisfied with Baker Tilly s performance and emphasized that the best method of ensuring quality is through transparency among staff, the auditors, and the board. MRO staff noted that best practices regarding auditor rotation vary and discussed options with the FAC. MRO staff recommends retaining Baker Tilly as the auditor for the 2018 financial audit as it would be very beneficial given the budget complications and changes due to the mid-year SPP RE transition. Baker Tilly s understanding 45 of 75

46 AGENDA 9 - Board Committee Reports of MRO, the industry, and its source of revenue are valuable given the amount of change expected in the next 18 months. Engaging a new firm at this time could prove complex. Nicki Donlon of Baker Tilly has been MRO s audit partner for 5 years, which is within the generally accepted range of rotating partners every 7-10 years. The last audit partner rotation took place for the 2012 independent financial audit. It is MRO s intent to request an audit partner rotation for the 2019 financial audit. The committee recommends that the board approve a resolution appointing Baker Tilly as independent auditor for the 2018 independent financial audit. The resolution is attached here for your review. 3. The draft 2019 budget was presented to the board during the April 20, 2018 board call. Comments and suggestions from the call were incorporated into the PowerPoint to be presented to the board on June 21, Click here to view the 2019 MRO Budget Presentation MRO staff requested the FAC approve a recommendation for board approval of the MRO 2019 Operating and Working Capital Reserves, Retiree Medical Funding, and Business Plan and Budget at the June board meeting. Click here to view the resolution. The committee recommends that the board accept the resolution approving the MRO 2019 Operating and Working Capital Reserves, Retiree Medical Funding, and Business Plan and Budget. Staff recapped the remaining timeline of the business plan and budget schedule, highlighting that the NERC Finance and Audit Committee (NERC FAC) met to discuss the draft budgets of all the Regions. NERC and the Regions presented the entire ERO budget to FERC on May 22, 2018, and then to the NERC FAC on May 23, MRO s business plan and budget will be presented to NERC in August for approval, along with those of the other Regional Entities. FERC approval is generally received in the October/November timeframe. 4. Staff provided a summary of the business insurance changes for 2018/2019. MRO utilizes insurance broker Arthur J. Gallagher (AJG) for assistance with managing MRO s insurance coverage. AJG continues to provide benchmark comparisons in coverage and for the upcoming renewal does not see the need for any significant changes in coverage, even with the increase in FTEs and the expansion of the geographic boundaries; AJG anticipates a 5 percent increase. It was also noted that last year staff and the FAC discussed adding cyber liability coverage into MRO s insurance package. In the insurance industry this type of coverage is relatively new, but it is the industry s proactive response to possible claims of unauthorized data releases or violations. These claims are not specific to MRO and its industry. Cyber liability coverage applies to any claim of an alleged data breach or unauthorized release of confidential data. MRO added the insurance last year and will continue to retain this coverage. 46 of 75

47 AGENDA 9 - Board Committee Reports 5. Staff shared that MRO had its annual spring retirement planning employee meeting with our advisor Mr. Brandon Larson from UBS. At the meeting, Larson reviewed the market performance over the past year and discussed current market changes and any notable trends that may impact participants in the plan. An executive summary of the 401(k) indicates that the current participation among staff and former staff with balances in the plan is notably high, demonstrating favorable plan choices. 6. The Investment Committee Chair summarized the MRO Investment Committee s response to the FAC s inquiry on the misalignment of the percent of international equity in the Retiree Medical Plan Trust as compared to the Investment Policy Statement (IPS). The Investment Committee has completed a proposed revision of the IPS, which will be addressed at the next quarterly FAC meeting. 47 of 75

48 AGENDA 9 - Board Committee Reports Date: June 7, 2018 AGENDA 9 Board Committee Reports c. Governance and Personnel Committee Report. Jeff Gust, Chair To: From: Subject: Action: MRO Board of Directors Jeff Gust, Governance and Personnel Committee Chair Governance and Personnel Committee Report None Information and Discussion Dear Board Members: At its last regularly scheduled meeting in May, the Governance and Personnel Committee (GPC or Committee) heard reports on the SPP RE dissolution and transition from Interim President and CEO Sara Patrick. She also provided the Committee an update on the MRO Strategic Plan and Metrics. No concerns were identified for either topic. The board will receive updated reports on both topics at our upcoming meeting. In response to the Committee s request to provide additional information regarding the reasons for MRO s higher than average results for the Gallup 12 Survey (see chart below), Patrick noted that the most significant factor is the importance of the organization s mission, the reliability of the bulk power system, and employee s connection to that mission. She observed that employees get to know each other through team work in the office, work travel, and our Volunteerism Committee which contributes to having a best friend at work. Patrick also credited the work of the Office of Productivity and Happiness. Patrick addressed the decrease in the response to questions related to employees development noting the limitations of advancement in a small organization and that this number has the potential for increase given the opportunities that will be provided by the expanded footprint. MRO s results are impressive and the Committee encouraged Patrick to continue this good work. 48 of 75

49 AGENDA 9 - Board Committee Reports MRO Staff Engagement Results Gallup 50th Percentile - Top Box ("Agree") Gallup 75th Percentile - Top Box ("Agree") MRO vs. 75th Percentile - Top Box ("Agree") Gallup Q12 Staff Need Attribute MRO 2015 MRO Know what is expected... Lower Need Getting 75% 72% 43% 56% 16% 2 Have materials... Getting Do what I do best... Giving Receive recognition... Giving Supervisor cares... Giving Opportunity for development... Giving My opinions matter... Sense of belonging Mission/purpose make job important... Sense of belonging Committed to quality work..... Sense of belonging Best friend at work... Sense of belonging Talked with me about progress... Personal Growth Opportunities to learn and grow... Higher Need Personal Growth % 8000% 7000% 6000% 5000% 4000% 3000% 2000% 1000% 0% MRO Staff Engagement Benchmarks MRO 2017 Gallup 50th Percentile - Top Box ("Agree") Gallup 75th Percentile - Top Box ("Agree") The Committee also had asked counsel to reconfirm that MRO s Policies and Procedures do not require NERC and FERC approval. NERC s Acting General Counsel confirmed NERC s position remains the same and that NERC s good faith reading of 18 CFR 39.1 is that this provision of FERC s regulations does not require NERC s or FERC s approval of MRO s policies and procedures. The Committee also received written reports from Sue Clarke on culture and talent management. Clarke noted all staff completed a time management course and will complete mandatory training on harassment and other employee conduct. She noted staff events are also planned to welcome new employees. Daily, Sue Clarke monitors MRO s third party hotline services for whistleblowing reports, and quarterly Clarke reports to the Committee. Since instituting the hot line several years ago, no reports have been received. Clarke also reported that the company s annual review of its insurance coverage was complete. The company s broker continues to advise that there is adequate coverage, even with the expansion, and appropriate coverage, particularly given the cybersecurity coverage added last year. 49 of 75

50 AGENDA 9 - Board Committee Reports Date: June 7, 2018 AGENDA 9 Board Committee Reports d. Dispute Resolution Committee Report. Tony Clark, Chair To: From: Subject: Action: MRO Board of Directors Tony Clark, Dispute Resolution Committee Chair Dispute Resolution Committee Report None - Information and Discussion Dear Board Members: Members of the Midwest Reliability Organization (MRO) Dispute Resolution Committee (DRC) provide oversight of the dispute resolution processes and procedures instituted pursuant to the MRO Bylaws. MRO Policy and Procedure 6 describes the objectives, responsibilities, membership, and quorum requirements of the committee. Appendix 6.1 contains the MRO Dispute Resolution Procedures. The DRC is required to meet at least annually and has established a practice of reviewing and recommending to the MRO Board of Directors any changes to the MRO Dispute Resolution Procedures. Additionally, the DRC annually reviews the lists of Mediator Arbitrators and Technical Advisors to ensure that those listed still meet the requirements and are interested in remaining on the list. This review was last conducted in September 2017 and will occur again around the same time in MRO has not received notice of any dispute for resolution under the Dispute Resolution Procedures. Action Items for Consideration by the MRO Board of Directors: There are no action items at this time. 50 of 75

51 AGENDA 10 - MRO Operations Report AGENDA 10 MRO Operations Report Dan Schoenecker, Vice President Operations Date: June 7, 2018 To: From: Subject: Action: MRO Board of Directors Dan Schoenecker, Vice President Operations MRO Operations Report None - Information and Discussion Dear Board Members: The following is a summary of the event analysis reports that have been submitted to MRO. The report includes new event reports that were submitted since the last board meeting and a year-year trend of the BPS impacts of all events. Also included are misoperations trending charts. Beginning July 1, 2018, this report will include all events reported by the 109 SPP RE registered entities that will be in the MRO Region. However, since we don t have all of the attributes of the historical events for SPP RE entities, we will establish new trend lines for the expanded MRO footprint. To the extent that the data on protection system misoperations is consistent, we will attempt to utilize those historical trends. New Events Reported Since the Last Board Meeting: Since the last board meeting on April 5, 2018, there were no brief reports submitted for Energy Management System (EMS) events and one brief report submitted for bulk power system (BPS) events through May 31, March 23, 2018 Event in the Minnesota area: Event Category: 1.a # of BES facilities Interrupted: 3 MW of Generation Lost: 0 MW MW of Load Lost: 0 MW # Misoperations: 1 Details: Galloping conductors resulted arching between a 345 kv line and a 161 kv line. In addition to the 345 kv line and the 161 kv line trips a 345/115 kv transformer tripped due to miscoordination of the 3 transformer s Ground Time Over Current (TOC) and the line relay s TOC. 51 of 75

52 AGENDA 10 - MRO Operations Report Summary of 2018 Transmission-Related Events: There have been four transmission-related events reported within the MRO Region to date in Four of the four events involved one or more misoperations. 600 MRO Event Trending: Jan 2011 to May 14, BPS Impact Index Event Date 52 of 75

53 AGENDA 10 - MRO Operations Report Status of Past Events: 1. February 1, 2017 Loss EMS in Minnesota (Cat 1h event): This event is pending cause-coding with the entity. 2. March 7, 2017 Event in the Tioga, North Dakota area: This event is pending cause-coding with the entity. 3. April 19, 2017 Event in South Dakota area: This event is pending cause-coding with the entity. 4. June 5, 2017 Event in the Wisconsin area: This event is pending cause-coding with the entity. 5. June 11, 2017 Loss of EMS Event in the Minnesota area: This event is pending cause-coding with the entity. 6. July 6, 2017 Loss of EMS Event in the Wisconsin area: This event is pending cause-coding with the entity. 7. July 20, 2017 Loss of EMS Event in the Nebraska area: Awaiting cause coding. 8. July 27, 2017 Event in the North Dakota area: 53 of 75

54 AGENDA 10 - MRO Operations Report This event is pending cause-coding with the entity. 9. August 15, 2017 Event in the North Dakota area: This event is pending cause-coding with the entity. 10. August 17, 2017 Loss of EMS Event in the Minnesota area: Awaiting cause coding. 11. November 7, 2017 Event in the North Dakota area: This event is pending cause-coding with the entity. 12. January 15, 2018 Event in the Nebraska area: Awaiting cause coding. 13. January 22, 2018 Event in the Nebraska area: Awaiting cause coding. Recommendations/Lessons Learned: The NERC Event Analysis Subcommittee (EAS) continues to develop and publish Lessons Learned from events. Since the last OC meeting, there have been three lessons learned published: Loss of Communication to Multiple SCADA RTUs at a Switching Center External Model Data Causing State Estimator to Not Coverage Back Office EMS Support Tools Impact Real-Time Situational Awareness Lessons Learned can be found at: 54 of 75

55 AGENDA 10 - MRO Operations Report MRO staff has been reviewing the individual company submittals of misoperations and working with the entities to assure their misoperations and total operations counts are accurate. Additionally, NERC is preparing a guidance document with examples to help entities accurately submit their counts. MRO entities are also participating on a series of WECC webinars that walk through various examples on establishing misoperation and total operation counts consistently. The MRO overall misoperation rate for 2017 is 9.1 percent. 55 of 75

56 AGENDA 10 - MRO Operations Report It can be seen that the overall total misoperation count per year has been consistently dropping since of 75