WECC Section 4.9 Review Progress Report Standing Committees Meeting October 14, 2015 W ESTERN E LECTRICITY C OORDINATING C OUNCIL

Section 4.9 Review Work Group Members – Kristine Hafner, Chair, Board Member – Rob Kondziolka, MAC Chair – Doug Larson / Maury Galbraith, WIRAB – Shelley Longmuir, Governance Committee – Joe McArthur, Governance Committee – Gary Tarplee, MAC 4.9 Review Task Force, Chair – Steve Goodwill, WECC staff Team Leads: – Melanie Frye – Steve Goodwill – Dave Godfrey

4.9 Review Work Group Flow and Timeline W ESTERN E LECTRICITY C OORDINATING C OUNCIL

4.9 WG Outreach and Stakeholder Opportunities for Comment Open Meetings −January 14 −February 3 −March 3 −March 9 −April 10 −May 19 −June 22* −July 14 −August 6 −August 24 “ Town Hall” Webinars −April 21 −August 26 Progress Reports via the Web −February 13 −March 20 −July 15 Initial Draft Posted for Comment −June 1-18** *4.9 Summit with MAC and committee chairs **Comment period extended at stakeholder request

4.9 Review Team Focus Areas 1.Relationship between MAC, members, WECC and the Board: Need to clarify respective responsibilities and accountabilities in all aspects of WECC’s business operations 2.Committee Roles, Scope and Structure : Need for greater alignment between the strategic priorities of the standing committees and WECC management and the translation of these priorities into operational plans 3.WECC’s Costs to Members: Need for options to stabilize and effectively manage WECC’s costs to members

 Expanding Partnership  Building Alignment  Gaining Clarity  Improving Cost-Effectiveness

Build on WECC’s history of collaboration, continue to develop trust and mutual respect within the community, and commit to working effectively together to achieve WECC’s mission of reliability assurance across the Western Interconnection. Elevate the visibility to the Board of the important technical work being performed by the member committees; provide regular opportunities for Board meeting reports

Develop a strong working partnership between the committees and WECC via the rechartered Joint Guidance Committee and supporting strategic and operational planning processes. Supplement the current stakeholder review and comment period with informational webinars prior to final Board approval in order to ensure member input during the development of the Business Plan and Budget.

Adopt a transparent, multi-year planning process where the MAC, the Standing Committees/TEPPC, and WECC management collaborate to set and align priorities and develop supporting operational plans, subject to Board approvals and oversight Re-charter the Joint Guidance Committee to: −ensure alignment of priorities and work plans of the committees with WECC’s strategic intent and priorities −identify cross functional/cross committee issues and strategies to address them −improve overall communications within and between committees 2. Building Alignment

Coordination Current Communication Flow Board of Directors WECC Staff WECC Exec. Deliverables Input OC JGC PCC MIC TEPPC MAC

Strategic policy input Communication Flow with Re-chartered Joint Guidance Committee Board of Directors WECC Staff WECC Exec. Deliverables Joint Guidance Committee MAC Tactical Input Work Assignment OC PCC MIC TEPPC Strategic technical input

Re-chartered Joint Guidance Committee Joint Guidance Committee Composition: −1 representative from each standing committee (OC, MIC, PCC) and TEPPC (committee chair or vice-chair – to be determined) −1 WECC executive (appointed by CEO) −1 MAC liaison Joint Guidance Committee Chair: WECC executive New JGC to update committee charter

Proposed WECC 3-year Planning Cycle Builds on the Reliability Assurance Model with a more structured and robust linkage to WECC’s operational priorities and activities Shift from annual plan to rolling three year operating plan to inform the annual Business Plan and Budget Identify key reliability challenges and organizational mandates to shape three year operating plans of Standing Committees/TEPPC and WECC staff Promote stakeholder input into the strategic planning process (e.g. MAC, WIRAB)

Adopt the Responsibility and Accountability Matrix (RAM) to strengthen participants’ understanding of their responsibilities, accountabilities, and decision rights in WECC activities. A living document, the RAM will evolve with the needs of the WECC enterprise. Clarify and communicate to members and stakeholders the most productive interactions between the MAC, the Standing Committees, and TEPPC in providing needed input to WECC staff and the Board of Directors. 3. Gaining Clarity

Responsibility & Accountability Matrix

A = ACCOUNTABLE/APPROVER “The Buck Stops Here” Ultimately answerable for the activity or decision; “yes” or “no” authority and veto power. Only one “A” can be assigned to an action. R = RESPONSIBLE/RECOMMEND “The Doer” Responsible for action/implementation. Responsibility can be shared. The degree of responsibility is determined by the individual with the “A”. C = CONSULT “In the Loop” To be consulted prior to a final decision or action. Implies “I’ll be informed and I’ll be heard.” Consultation does not imply control. I = INFORM “Keep in the Picture” Needs to be informed after a decision or action is taken.

Each committee, sub-committee, work group and task force should revisit charter requirements for in-person meetings to maximize their value and effectiveness. 4. Improving Cost Effectiveness

Costs to Participate in WECC Committees In 2014: WECC had 57 committees, subcommittees, work groups and task forces with 2,157 members WECC hosted 68 committee, subcommittee, work group and task force meetings There were 2,162 attendees at those meetings (excludes webinar participants) It costs about $2.6 million in labor and $1.3 million in travel expenses for those participants There was another $3.9 to $4.7 million in “at home” labor cost for WECC members

4. Improving Cost Effectiveness Establish an annual adjustable cap (%) based on historical increases and forecasts of budgetary needs to limit fluctuations and increases in assessments. Amend the reserve policy to include a balancing account to support this cap.

Budget and Assessment Volatility

Completing the 4.9 Review W ESTERN E LECTRICITY C OORDINATING C OUNCIL Prepare WG Recommendations Finalize Report TimingSeptemberOctoberNovember- December Work group Activities Summarize WG recommendations and review with Board Seek public comments on draft final report Refine report based on comments Finalize recommendations and and submit to Board for approval Key Dates Sept 15/16: Board Presentation Sept. 17: WG meeting to finalize posting Sept 21: Post Draft report for public comment Oct 21: Comments on draft report close Nov 2: WG meeting to review comments Nov 9: WG meeting to agree on final report Nov 11: Notice recommendations Nov 17: Post final report Dec 2: Seek Board Approval Public Comment

In Appreciation Thanks to the many WECC members and staff who contributed to the Section 4.9 Review process over the past nine months.

Questions? Comments? W ESTERN E LECTRICITY C OORDINATING C OUNCIL 25