1 Page MIDWEST RELIABILITY ORGANIZATION Final Minutes of the MRO Compliance Committee Meeting WebEx Conference Call 9:02 a.m. 11:49 a.m. 1. Call to Order and Introductions Compliance Committee Chair Mahmood Safi called the meeting to order at 9:02 a.m., introductions were made, and roll call was taken. Chair Safi extended a warm welcome to meeting attendees. a. Determination of Quorum Chair Safi confirmed that a quorum of the MRO Compliance Committee was present. A list of attendees is included as Exhibit A. b. Standards of Conduct and Anti-Trust Guidelines Chair Safi briefly reviewed MRO s Standards of Conduct and Anti-Trust Guidelines with the meeting attendees. c. Review of Robert s Rules of Order Chair Safi briefly reviewed the Robert s Rules of Order with the meeting attendees. 2. Consent Agenda a. Approve agenda The agenda for today s meeting was the only item on the consent agenda. There were no questions or discussion on the agenda. Upon a motion duly made and seconded, the MRO Compliance Committee unanimously approved the agenda for today s meeting. 3. Item Review Desirée Sawyer, MRO Compliance Administrator, reviewed the open items on the action items log with the committee. Discussion ensued. It was proposed that action items 2013-009, 2017-13, 2018-01, 2018-02, 2018-03, 2018-05, 2018-06, 2018-07, and 2018-10 be marked completed. Upon a motion duly made and seconded, the MRO Compliance Committee unanimously approved action items 2013-009, 2017-13, 2018-01, 2018-02, 2018-03, 2018-05, 2018-06, 2018-07, and 2018-10 be marked completed. 4. Compliance Monitoring Update Desirée Sawyer, MRO Compliance Monitoring Coordinator, provided a Compliance Monitoring update.
2 Page a. Compliance Oversight Plan Development Update Desirée Sawyer, MRO Compliance Monitoring Coordinator, informed the committee that the non-ba, RC and TOP entities are scheduled to start receiving draft COPs in May as the internal secondary reviews have been completed. After a review of the BA, RC, TOP COPs some updates were made and the drafts have started going out to those entities. b. 2018 CMEP Implementation Plan Updated Desirée Sawyer, MRO Compliance Monitoring Coordinator, informed the MRO CC that MRO requested NERC update the MRO appendix to the CMEP Implementation Plan to remove MOD-008-1 R4 and MOD-025-2 R1, R2 and R3 from the Q3 2018 self-certification schedule, and FAC-003-4 R6 and R7 from the Q4 2018 self-certification schedule. Sawyer asked the MRO CC and/or the PROS if they would find value in reviewing the self-certification worksheets to identify any concerns before they are issued. Discussion ensued. The MRO CC and PROS would like to review the selfcertification worksheets before they are issued to provide feedback. The review period for the worksheet will depend upon the complexity of the worksheet. Technology will be leveraged so the committees can collaborate and provide feedback in the same document. Action Item: MRO staff to setup secure portal where the MRO CC and PROS can collaborate and provide feedback on self-certification worksheets. c. 2019 Audit Schedule Desirée Sawyer, MRO Compliance Monitoring Coordinator, stated that the MRO s draft 2019 audit schedule has been posted to the MRO s website. All entities on the schedule have confirmed the audit dates. MRO is waiting on confirmation for coordinated oversight in order to finalize the schedule. Action Item: MRO staff will send out a link to the 2019 draft audit schedule on MRO s website. 5. Enforcement Update a. CMEP Report Val Agnew, MRO Vice President of Enforcement, noted that the CMEP Report is attached in the agenda packet and discussed some highlights from the report. MRO continues to have a very high rate of self-identified non-compliance. Most of the violations are continuing to be processed outside of enforcement as Compliance Exceptions. The percent filed/dismissed for 2015 discovery and processing activity will go up to 100% in the next CMEP Report. The number of non-compliances is increasing, mainly due to self-logs. Agnew noted this as a very positive trend and credited MRO self-logging entities for identifying minimal risk issues. Discussion ensued.
3 Page Agnew shared that MRO has an internal goal of getting self-logged instances of noncompliance processed within one quarter. It was asked if the CMEP Report could show the processing status for self-logged issues. MRO will provide the MRO CC some sample metrics for discussion prior to adding metrics into the CMEP Report. Action Item: MRO Staff will provide the MRO CC with sample self-logging metrics for discussion. b. Self-Log Template Jackson Evans, MRO Enforcement Attorney, shared the draft updated self-log template with the committee. The self-log template was updated to highlight specific data points that NERC requires, most of which are date fields. Mr. Evans explained that the updated template will help entities include all of the necessary information in the initial self-log, which will expedite processing by reducing the need for follow-up questions. The draft template was sent out to NERC and MRO s self-logging participants for input, and many of their comments were incorporated. Evans walked through the draft template for the committee members and guests. Discussion ensued. MRO staff was asked to share the draft self-log template with the MRO CC and PROS. Action Item: MRO Staff will send the Self-Log template to the MRO CC and PROS. MRO CC took morning break 10:00 a.m. and the meeting resumed at 10:20 a.m. 6. Status of SPP RE Dissolution Sara Patrick, MRO Interim President and CEO, provided an update on the dissolution of the SPP Regional Entity. Patrick stated that initially the transition date was scheduled for January 1, 2019. During the February NERC BOT meeting a proposed transition date of July 1, 2018, with a dissolution date of August 31, 2018, was discussed. Patrick walked the attendees through the status of the various facets of the regional transition of entities from SPP RE to MRO that included outreach, governance, data, staffing, and facilities. Discussion ensued. It was asked that, given all of the new phishing attempts and spam, if registered entities could be updated as new MRO staff are hired so that the entities are able to identify when contact from a new MRO staff member is legitimate. Action Item: MRO Staff to introduce new MRO Staff members via the MRO ReliablityMatters as they are hired.
4 Page 7. Organizational Group Reorganization Discussion Sara Patrick, MRO Interim President and CEO, explained the new vision for the MRO organizational groups. MRO began review of the organizational group structure in early 2018 and is currently in the planning stages with the MRO Board. The plan is to restructure the committees as councils to allow for membership based on expertise and experience rather than sector. Three councils are proposed: Security, CMEP and Reliability. The MRO Board of Directors would select five to nineteen members for each of the councils. Each council would have a limit of two members from the same entity. Ms. Patrick restated that this restructure was in a planning phase with the MRO Board and this may not be the final decision the MRO Board makes. The currently organizational structure will continue for 2018, with any change occurring in 2019. Discussion ensued. It was recommended to have this discussion as an agenda item for the joint MRO CC s 3 rd Quarter meeting that will take place with the MRO Standards Committee. Action Item: Ensure that the Organizational Group Reorganization discussion is an agenda item for the MRO CC and MRO Standards Committee s joint 2018 3 rd Quarter meeting. 8. PROS Internal Controls Training/Presentation Update Joe DePoorter, PROS Chair, stated that the PROS were tasked with creating an Internal Controls 101 presentation. PROS Chair DePoorter and MRO CC members Karen Demos and Mike Smith developed a presentation and sent it to PROS members for comment. The PROS members provided comments, questioning why we are doing the same thing and expecting different results. PROS Chair DePoorter is looking for feedback on what if anything the PROS should pursue with this task. Discussion ensued. The presentation is canceled and PROS Chair DePoorter is co-authoring an article with Chair Safi that will highlight all of the previous internal controls outreach the PROS has done. 9. Root Cause Template/Guidance Terry Bilke, MRO Compliance Committee Member, shared that this is a MRO CC goal and asked for assistance to determine the scope of this project. Discussion ensued. It was determined that Bilke and a MRO Risk Assessment and Mitigation Staff member will write a MRO newsletter article directing entities to the ERO guidance that already exists on Root Cause of noncompliances, such the ERO Self-Report Guidance and MRO s case and dismissal notes. Action Item: MRO CC Member Bilke to work with MRO Staff to draft an article that identifies guidance for root cause. 10. Reports a. First Quarter Letter to MRO Members Sara Patrick, MRO Interim President and CEO, covered the highlights from the First Quarter letter to MRO Members. The entire letter, from Ms. Patrick, MRO Interim President and CEO and Ms. Silvia Parada Mitchell, MRO Board Chair, is available in the agenda packet for this meeting and can be found on MRO s website, here. Discussion ensued.
5 Page b. NERC CCC Report Terry Bilke, also MRO s Representative of the NERC Compliance and Certification Committee (CCC), covered highlights from the CCC s last meeting and stated the full report is in the agenda packet. Bilke stated that Jennifer Flandermeyer from Kansas City Power & Light (KCPL) will be the new chair of the NERC CCC. There are openings on the CCC for the US Federal, Canada Federal, Large End User, Merchant Generator and Cooperative sectors. The NERC CCC will be issuing a stakeholder perception survey in August. The CCC also discussed that NERC is revising the post audit survey, which will come out later this year, and the ERO Enterprise s CMEP Technology Project. More information on this project can be found on NERC s website. c. Performance and Risk Oversight Subcommittee (PROS) Joe DePoorter, PROS Chair, informed the committee that the PROS report is in the agenda packet. PROS Chair DePoorter stated that, as a result of the earlier discussion, he will instruct the committee to discontinue the Internal Controls 101 project. d. Mid-Continent Compliance Forum (MCCF) Mark Buchholz, MRO Compliance Committee member, informed the committee that the MCCF report is in the agenda packet. Buchholz shared that the Spring MCCF meeting will be May 22, 2018, in Bloomington, MN. Buchholz wanted to thank Chair Mahmood for his SPP Workshop and SPP RCWG presentations on the MCCF and MRO Compliance Committee. Discussion ensued. e. SPP Reliability Compliance Workgroup (SPP RCWG) Mark Buchholz, MRO Compliance Committee member, informed the committee that the a written report is in the agenda packet. 11. Other Business Val Agnew, MRO Vice President of Enforcement, asked for feedback on the new MRO Case and Dismissal Notes format. Discussion ensued. Members stated that the new MRO Case and Dismissal Notes format is providing value. Sara Patrick, MRO Interim President and CEO, asked the committee for topic suggestions for the 2018 CMEP Conference. Discussion ensued. One idea offered was to provide presentations on audit approaches for new standards. Action Item: MRO CC and PROS members to provide proposed topics for the 2018 CMEP Conference to MRO Staff by May 18, 2018.
6 Page Desirée Sawyer, MRO Compliance Administrator, reviewed the action items captured during today s meeting with the committee. 12. Adjourn Upon a motion duly made and seconded, and having no further business to conduct, MRO CC Chair Safi adjourned the meeting at 11:49 a.m. Prepared by: Desirée Sawyer, MRO Compliance Monitoring Coordinator Your signature represents independent verification that what the minutes say happened, did actually happen. Reviewed and Submitted by: Valerie Agnew, Vice President of Enforcement, Compliance Committee Secretary
7 Page Exhibit A WebEx Meeting Attendees Committee Members Present Name Mahmood Safi Terry Harbour Janell Johnson Karen Demos Mark Buchholz Mike Smith Terry Bilke MRO Staff Name Sara Patrick Richard Burt Val Agnew Jackson Evans Desirée Sawyer Guests Name Joe DePoorter (PROS Chair) Tony Eddleman (PROS) Doug Johnson (MRO Board, PROS) Mike Zajmalowski Jon Veldhuzen Committee, Sector Chair, Compliance Committee, Cooperative Vice Chair, Compliance Committee, Investor Owned Utility Compliance Committee, Municipal Utility Compliance Committee, Generator and/or Power Marketer Compliance Committee, Federal Power Marketing Agency Compliance Committee, Canadian Utility Compliance Committee, Transmission System Operator Title Interim President and CEO Vice President of Risk Assessment, Mitigation and Standards Vice President of Enforcement Enforcement Attorney Compliance Monitoring Coordinator Organization Madison Gas & Electric Nebraska Public Power District American Transmission Company Northland Power Northland Power