1. Project 2010-17 Definition of Bulk Electric System & Bulk Electric System Rules of Procedure Development Presenter: Peter Heidrich, FRCC – BES Drafting Team Chair

2. Topics  Standard Drafting Team (SDT) Accomplishments  1 st Posting for Formal Comments  Bulk Electric System (BES) Definition Significant Revisions  Technical Principles Concepts  Bulk Electric System Rules of Procedure (BESROP) Update  Short-term Project Milestones 2

3. SDT Accomplishments/Planned Activities  Industry-Wide Joint BES/ROP Webinar (May, 2011)  SDT Activities Meetings Conference Calls Future Meetings  Industry-Wide Joint BES/ROP Webinar (Concurrent Posting) 3

4. 4 1 st Posting for Formal Comments  BES Definition Comments from 279 different people from 213 companies representing 10 of the 10 Industry Segments

5. BES Definition Significant Revisions 5  Exclusion of Local Distribution Facilities  Generation Threshold Values  Local Networks (High Voltage Limit)  Reactive Resources

6. Exclusion of Local Distribution Facilities 6 Bulk Electric System (BES): Unless modified by the lists shown below, all Transmission Elements operated at 100 kV or higher and Real Power and Reactive Power resources connected at 100 kV or higher. This does not include facilities used in the local distribution of electric energy as established by applicable regulatory authorities. Core Definition

7. Generation Threshold Values BES Designation Criteria Inclusions: I2 - Generating resource(s) located at a single site with aggregate capacity greater than 75 MVA (gross aggregate nameplate rating) including the generator terminals through the high-side of the generator step-up transformer(s) connected at a voltage of 100 kV or above. 7 BES Designation Criteria

8. Local Networks (High Voltage Limit) BES Designation Criteria Exclusions: E3 - Local Networks (LN): A group of contiguous Elements operated at or above 100 kV but less than 300 kV that distribute power to Load rather than transfer bulk power across the Interconnected System. LN’s emanate from multiple points of connection at 100 kV or higher to improve the level of service to retail customer Load and not to accommodate bulk transfer across the interconnected system. 8 BES Designation Criteria

9. Reactive Resources BES Designation Criteria Inclusion: I5 –Static or dynamic devices dedicated to supplying or absorbing Reactive Power that are connected at 100 kV or higher, or through a dedicated transformer with a high-side voltage of 100 kV or higher, or through a transformer that is designated in Inclusion I1. 9 BES Designation Criteria

10. Reactive Resources BES Designation Criteria Exclusion: E4 – Reactive Power devices owned and operated by the retail customer solely for their own use. 10 BES Designation Criteria

11. 11  Exception Process Technical Principles Comments from 75 different people from 45 companies representing 8 of the 10 Industry Segments 1 st Posting for Formal Comments

12. 12  Reliability benefits of an Element cannot be determined by a single study or analysis of a single parameter.  Not feasible to establish continent-wide values and/or limits. Exception Process Technical Principles

13. 13  The SDT has adopted a new approach: Targeted questions for Transmission and Generation addressing the Facility characteristics with guidance on the type of supporting evidence to accompany request. No hard numbers to guide the evaluation of the request. Engineering judgment will be utilized by common Regional panels to perform the evaluation of the evidence in an open, repeatable and transparent process. Exception Process Technical Principles

14. DRAFT BES Rules of Procedure Process Objectives  ROP Process spells out: Who to file a request with When to file a request and expect a response How to file a request and what to include Who decides based on technical justification How consistency is assured 14 BES Exceptions (linked to BES Definition Designation Criteria)

15. BES Rules of Procedure Team Update  The Rules of Procedure Team produced a draft procedure document that would be incorporated as an appendix to the Rules of Procedure  This procedure document was posted for an informal 30-day comment period to obtain industry input ending June 10 th. 15

16. Industry Input  The posted Rules of Procedure exceptions process received comments from 176 different people from 131 companies across all 10 industry segments in Canada and the US.  There is strong support for a bright-line definition with an associated exception process. 16

17. Industry Input  There is a strong desire for a process that is more efficient than the one presented in the draft in two aspects: 1) greater clarity in the process and timelines for process steps, and 2) help in determining the status of an element by application of the definition.  The ROP team is considering the comments received and will produce a proposed amendment to the Rules of Procedure for a 45-day formal comment period concurrent with the posting of the BES definition in early September. 17

18. Near-term Project Milestones  Concurrent Posting Periods (Sept./Oct. 2011) Revised BES definition with exception criteria (inclusions and exclusions) BES Definition Exception Process Technical Principles to support request for BES Definition Exception  Industry Webinar 18

19. Question & Answer Website: http://www.nerc.com/filez/standards/Project2010-17_BES.htmlhttp://www.nerc.com/filez/standards/Project2010-17_BES.html 19