Regional Criteria Task Force - Update RPIC Meeting Loveland, CO July 29, 2009

Task Force Participants Andrew Gallo, Seattle City Light Andrew Gallo, Seattle City Light Vicken Kasarjian, SMUD Vicken Kasarjian, SMUD David Lemmons, Xcel Energy Services David Lemmons, Xcel Energy Services Brian Theaker, Dynegy Brian Theaker, Dynegy Donald Watkins, BPA Donald Watkins, BPA

Task How should WECC address the fact that some Regional Criteria do not lead to sanctions, while others -- if created pursuant to a fill-in-the-blanks (FITB) reliability standard -- may lead to sanctions How should WECC address the fact that some Regional Criteria do not lead to sanctions, while others -- if created pursuant to a fill-in-the-blanks (FITB) reliability standard -- may lead to sanctions

Considerations A new WECC document type should be avoided A new WECC document type should be avoided Technically, no Regional Criteria, in-and-of themselves, lead to penalties/sanctions Technically, no Regional Criteria, in-and-of themselves, lead to penalties/sanctions i.e. the failure to follow a Regional Criteria will not lead to penalties/sanctions i.e. the failure to follow a Regional Criteria will not lead to penalties/sanctions BUT, failure to follow a Regional Criterion may lead to sanctions for violation of a Reliability Standard BUT, failure to follow a Regional Criterion may lead to sanctions for violation of a Reliability Standard

Issues What document type should be used to fill in the blanks What document type should be used to fill in the blanks What process should be used to develop the documents that fill in the blanks What process should be used to develop the documents that fill in the blanks If Regional Criteria are used, how does WECC ensure that someone reading a Regional Criterion will know the difference between those that may lead to sanctions and those that will not If Regional Criteria are used, how does WECC ensure that someone reading a Regional Criterion will know the difference between those that may lead to sanctions and those that will not

Conclusions Issue 1: What document type should be used to fill in the blanks Issue 1: What document type should be used to fill in the blanks Regional Criteria are defined as Board-approved WECC documents, "whose purpose is to establish mandatory rules which must be followed by all entities within the interconnection in order to maintain reliability Regional Criteria are defined as Board-approved WECC documents, "whose purpose is to establish mandatory rules which must be followed by all entities within the interconnection in order to maintain reliability All entities in the interconnection must follow the FITB Reliability Standards All entities in the interconnection must follow the FITB Reliability Standards Consequently, "Regional Criteria" are the proper document type for fulfilling the FITB Reliability standards Consequently, "Regional Criteria" are the proper document type for fulfilling the FITB Reliability standards

Conclusions (contd) Issue 2: What process should be used to develop the documents that fill in the blanks Issue 2: What process should be used to develop the documents that fill in the blanks The full Standards Development Process (SDP) The full Standards Development Process (SDP) The SDP ensures that everyone affected by the Regional Criterion will get notice and an opportunity to comment on it (i.e. due process) The SDP ensures that everyone affected by the Regional Criterion will get notice and an opportunity to comment on it (i.e. due process)

Conclusions (contd) Issue 3: How to ensure that someone reading Regional Criteria will know the difference between those that may lead to sanctions and those that will not Issue 3: How to ensure that someone reading Regional Criteria will know the difference between those that may lead to sanctions and those that will not Include disclosure language in the "Introduction" of the Regional Criteria Include disclosure language in the "Introduction" of the Regional Criteria For example: For example: "This Regional Criterion was developed pursuant to North American Electric Reliability Corporation (NERC) Reliability Standard XXX- XXX-X, Requirement X and, as such, may lead to penalties or sanctions for violation of that Reliability Standard if not followed."

Motion RPIC recommends that the Board adopt a policy that the documents that fill in the Fill-In-The-Blank Reliability Standards be tagged as Regional Criteria and include in the introduction the following statement: RPIC recommends that the Board adopt a policy that the documents that fill in the Fill-In-The-Blank Reliability Standards be tagged as Regional Criteria and include in the introduction the following statement: "This Regional Criterion was developed pursuant to North American Electric Reliability Corporation (NERC) Reliability Standard XXX-XXX-X, Requirement X and, as such, may lead to penalties or sanctions for violation of that Reliability Standard if not followed."

One Final Concern…. Some Regional Criteria (not those developed pursuant to FITB standards) deal with weighty topics yet carry no penalty for failure to comply Some Regional Criteria (not those developed pursuant to FITB standards) deal with weighty topics yet carry no penalty for failure to comply The group sees this as a potential problem The group sees this as a potential problem i.e. if the subject matter of a Regional Criterion is important enough to go through the SDP, it must be a very important issue; but, a member could ignore/violate the Regional Criterion and suffer no adverse consequence i.e. if the subject matter of a Regional Criterion is important enough to go through the SDP, it must be a very important issue; but, a member could ignore/violate the Regional Criterion and suffer no adverse consequence We didnt solve this one……. We didnt solve this one…….

Questions?