FERC, NERC, and NAESB Some Assorted Updates Bob Harshbarger July MIC Meeting WECC Offices Salt Lake UT

Standards for Business Practices and Communication Protocols for Public Utilities Docket No. RM Notice of Proposed Rulemaking. Commission proposes to incorporate by reference in the Commissions regulations, with certain enumerated exceptions, North American Energy Standards Boards (NAESB) Wholesale Electric Quadrants (WEQ) Version 003 of the Standards for Business Practices and Communication Protocols for Public Utilities. These standards include: (1)modifications to support Order Nos. 890, 890-A, 890-B, and 890-C, including standards for Network Integration Transmission Service (NITS) on Open Access Same-Time Information System (OASIS) and Service Across Multiple Transmission Systems (SAMTS); (2)modifications to the OASIS-related standards to support Order Nos. 676, 676- A, 676-E, and 717 and for consistency; and (3)other standards, such as the Coordinate Interchange standards, the Gas/Electric Coordination standards, Public Key Infrastructure standards, Smart Grid standards, standards related to Demand Side Management and Energy Efficiency, and revised definitions to create a standard set of terms, definitions and acronyms applicable to all NAESB WEQ standards.

Frequency Response and Frequency Bias Setting Reliability Standard Docket No. RM Notice of Proposed Rulemaking Commission proposes to approve Reliability Standard BAL (Frequency Response and Frequency Bias Setting), submitted by the North American Electric Reliability Corporation (NERC). The proposed reliability standard defines the necessary amount of frequency response needed for reliable operations for each Balancing Authority within an interconnection. The order proposes to approve proposed Reliability Standard BAL However, the Commission has concerns about certain provisions of the proposed reliability standard and proposes that NERC submit a report and develop modifications to address the identified concerns.

Revisions to Modeling, Data, and Analysis Reliability Standard Docket No. RM Final rule Approves the Modeling, Data, and Analysis Reliability Standard MOD

Protection System Maintenance Reliability Standard Docket No. RM Notice of Proposed Rulemaking Commission proposes to approve a revised Reliability Standard, PRC – Protection System Maintenance, to supersede four existing reliability standards related to maintenance and testing of protection systems and of underfrequency and undervoltage load shedding equipment. The NOPR seeks clarification and comment on three aspects of the proposed reliability standard: (1)verification of operability and settings upon placement in-service of new or modified protection systems; (2)use of a four percent target for countable events in performance-based programs; and (3)the violation severity level for one type of Requirement R1 violation.

Regional Reliability Standard BAL-002-WECC-2 – Contingency Reserve Docket No. RM Notice of Proposed Rulemaking Commission proposes approval of WECC regional Reliability Standard BAL-002- WECC-2 (Contingency Reserve) Also proposes to retire the currently-effective WECC regional Reliability Standard BAL-STD (Operating Reserves), and Remove two WECC Regional Definitions, Non-Spinning Reserve and Spinning Reserve, from the NERC Glossary of Terms. In addition, proposes to direct NERC to submit an informational filing after the first two years of implementation of regional Reliability Standard BAL-002-WECC-2 containing data that addresses the adequacy of contingency reserve in the Western Interconnection.

Third-Party Provision of Ancillary Services; Accounting and Financial Reporting for New Electric Storage Technologies Docket Nos. RM and AD Final rule. The Commission revises regulations to enhance the ability of ancillary service providers to compete for the sale of certain ancillary services to public utility transmission providers. Also adopts reforms to provide greater transparency with regard to reserve requirements for Regulation and Frequency Response. The Commission requires each public utility transmission provider to add to its Open Access Transmission Tariff Schedule 3 a statement that it will take into account the speed and accuracy of regulation resources in its determination of reserve requirements for Regulation and Frequency Response service. Finally, adopts reforms to FERCs accounting and reporting regulations to add new electric plant and operation and maintenance expense accounts for energy storage devices.

Communication of Operational Information Between Natural Gas Pipelines and Electric Transmission Operators Docket No. RM Notice of Proposed Rulemaking The Commission proposes to revise Parts 38 and 284 of the Commissions regulations to provide explicit authority to interstate natural gas pipelines and public utilities that own, operate, or control facilities used for the transmission of electric energy in interstate commerce to share non-public, operational information with each other for the purpose of promoting reliable service or operational planning on either the public utilitys or pipelines system.

Use of Last-IN, First-Out versus Pro Rata Curtailment for Non-Firm Transmission Service Docket Nos. ER & ER Request for Clarification Specifically, Puget Sound Energy seeks clarification of whether the Commission intended that its ruling on pro rata curtailment be a broad pronouncement on curtailment priority schemes for all firm and non-firm classes of customers, or whether it is limited to the subset of customers subject to the conditional curtailment service classification.

NERC Standards Announcement MOD A, B, and C Industry Webinar Conclusions from Informal Development Moving into Formal Development July 30, 2013 | 1:00 – 3:00 p.m. ET The three MOD projects presentations will provide information regarding the issues identified during the informal development stage, the conclusions for those issues and the recommendation posted. MOD A addresses current standards MOD-001, MOD-004, MOD-008, and MOD-028 through MOD-030. MOD A proposes reducing 56 requirements to 6 requirements. This project also resolves 20 FERC directives. MOD B addresses current standards MOD-010 through MOD-015. While maintaining data reporting that is necessary for reliability (and thus does not fall under Paragraph 81 criteria), MOD B proposes reducing 12 requirements in 6 different standards to 7 requirements in 2 standards. This project also resolves 13 FERC directives. MOD C addresses current standards MOD-016 through MOD-019 and MOD While maintaining data reporting that is necessary for reliability (and thus does not fall under Paragraph 81 criteria), MOD C proposes reducing 10 requirements to 3 requirements. This project also resolves 14 FERC directives.

NERC Standards Development Project INT Rewrite Addressing FERC directive in Order 693. Intra-BA tagging Address RC and TOP participation Paragraph 81 concerns Standards Committee moving beyond process monitoring Up-coming posting for 30 day comments

NERC Famous Paragraph 81 VII. Other Approaches to Gain Efficiencies and Reduce Compliance Backlogs 81. The Commission notes that NERCs FFT initiative is predicated on the view that many violations of requirements currently included in Reliability Standards pose lesser risk to the Bulk-Power System. If so, some current requirements likely provide little protection for Bulk-Power System reliability or may be redundant. The Commission is interested in obtaining views on whether such requirements could be removed from the Reliability Standards with little effect on reliability and an increase in efficiency of the ERO compliance program. If NERC believes that specific Reliability Standards or specific requirements within certain Standards should be revised or removed, we invite NERC to make specific proposals to the Commission identifying the Standards or requirements and setting forth in detail the technical basis for its belief. In addition, or in the alternative, we invite NERC, the Regional Entities and other interested entities to propose appropriate mechanisms to identify and remove from the Commission-approved Reliability Standards unnecessary or redundant requirements. We will not impose a deadline on when these comments should be submitted, but ask that to the extent such comments are submitted NERC, the Regional Entities, and interested entities coordinate to submit their respective comments concurrently.

NAESB Change in Participation Rules – pay to play OASIS Subcommittee – pre-emption and competition Business Practice Subcommittee – Parallel Flow Visualization Joint Electric Scheduling Subcommittee e-Tag – incorporation of PKI EIR modifications Interoperability testing e-Tag NAESB WEQ EC remanded back to JESS Address tagging into or out of a Market Address Reliability Limit Profile management Interoperability testing WEQ-004 Modifications – Coordinate Interchange Business Practice Standards Order 764 – 15 minute scheduling NERC Project INT rewrite Electric Industry Registry Adjacency data entry 2013 Q 3 deadline

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