1. 1 Mandatory Reliability Standards (MRS) Assessment Report No. 8 Workshop December 16, 2014 Teleconference Bridge Details: 604-899-2339 (Vancouver) 1-877-385-4099 Toll Free (outside Vancouver) Participant Password: 8128442#

2. 2 BC HYDRO INTRODUCTIONS REGULATORY  Scott Tone RELIABILITY COMPLIANCE  Patricia Robertson  Vijay Raghunathan

3. 3 WORKSHOP AGENDA TopicTiming Introductions~2 mins. Overview and Purpose of the Workshop~2 mins. MRS Background ~5 mins. MRS in British Columbia ~10 mins. Assessment Report Scope and Feedback Process ~40 mins. Closing Summary ~5 mins. Question and Answer ~15 mins.

4. 4 OVERVIEW AND PURPOSE MRS BACKGROUND  Federal Energy Regulatory Commission (FERC)  North American Electric Reliability Corporation (NERC)  Western Electricity Coordinating Council (WECC)  British Columbia Utilities Commission (BCUC) MRS IN BRITISH COLUMBIA  MRS Legislation and Framework in B.C.  MRS Assessment Reports and Filing Process ASSESSMENT REPORT SCOPE AND FEEDBACK PROCESS  Assessment Report No. 8 Scope and Deadlines for Feedback  How to Provide Feedback  How Feedback is Incorporated and Considered

5. Federal Energy Regulatory Commission Compliance legislation with NERC/WECC MRS Western Electricity Coordinating Council Coordinating and promoting system reliability including auditing British Columbia Utilities Commission The application of MRS legislation and enforcement in British Columbia. WECC (administrator) BCUC 5 STANDARD DEVELOPMENT & COMPLIANCE North American Electric Reliability Corporation Development and enforcement of MRS

6. 6 MRS IN BRITISH COLUMBIA MRS LEGISLATION IN B.C.  2007 British Columbia Energy Plan  Included a Policy Action to “ensure that the province remains consistent with North American transmission reliability standards”  Utilities Commission Act  The provincial government amended the Act to include Section 125.2 to establish the adoption of MRS in B.C., give the BCUC jurisdiction to adopt MRS for application in B.C., and assign BC Hydro the responsibility to review each MRS and report on their suitability for adoption in B.C.  MRS standards may only be fully adopted or rejected by the BCUC  MRS Regulation  The provincial government issued the MRS Regulation which prescribes the entities that are subject to the MRS and directs BC Hydro to provide a report to the Commission within one year after MRS are adopted by FERC

7. 7 MRS IN BRITISH COLUMBIA MRS ASSESSMENT REPORTS  BC Hydro batches MRS and files one assessment report with the BCUC each year. Should a MRS be considered sufficiently critical to reliability a separate standard-specific assessment report will be filed.  With feedback from MRS Registered Entities, BC Hydro reviews each MRS assessing: a)any adverse impact of the MRS on the reliability of electricity transmission in B.C. if the MRS were adopted; b)the suitability of the MRS for B.C.; c)the potential cost of the MRS if it were adopted; and d)any other matter prescribed by regulation or identified by order of the Commission.  Feedback received from Registered Entities is included in the public MRS Assessment Report.

8. 8 MRS IN BRITISH COLUMBIA MRS REPORT FILING PROCESS  Upon receipt of the assessment report the Commission makes the report available to the public for comment  The Commission considers any comments received in reply to the publication MRS ADOPTION IN B.C.  The Commission must adopt the MRS assessed in the report if the Commission considers that the MRS are required to maintain or achieve consistency in B.C. with other jurisdictions that have adopted the MRS  The Commission Is not required to adopt a MRS if the Commission determines, after a hearing, that the MRS is not in the public interest

9. MRS IN BRITISH COLUMBIA MRS COMPLIANCE  The B.C. government has vested the BCUC with the authority and the responsibility for MRS compliance and enforcement  The BCUC has the ability to levy monetary penalties for MRS violations  The Rules of Procedure and Compliance Monitoring Program sets out the administrative framework for the monitoring of compliance with adopted MRS in B.C.  The BCUC has an administration agreement with WECC to assist with monitoring compliance and registration 9

10. ASSESSMENT REPORT NO. 8 SCOPE Covers standards and Glossary Terms approved by FERC between December 1, 2013 and November 30, 2014. 12 new and 25 revised standards including:  CIP Version 5 (Critical Infrastructure Protection)  PRC-005-2 consolidation (Protection System Maintenance)  INT and MOD consolidations (Interchange and Modelling)  New PRC standards (Protection and Control)  TPL-001-4 consolidation (Transmission Planning) 32 new and 18 revised Glossary Terms  Many terms associated with aforementioned new/revised standards. 10

11. FEEDBACK INSTRUCTIONS Feedback request email sent on December 15, 2014 to all 39 BCUC MRS registered entities per BCUC’s list dated December 1, 2014. Deadline for feedback is end of business on Friday February 27, 2015.  Feedback received after this date will NOT be considered. New standards, Glossary of Terms and Redlines can be found on the BC Hydro Reliability website here (link in feedback request email): http://transmission.bchydro.com/transmission_system/reliability/ http://transmission.bchydro.com/transmission_system/reliability/ 11

12. BC HYDRO RELIABILITY WEBSITE 12

13. FEEDBACK SURVEY FORMS Walk through Glossary and Standards Feedback Survey Forms 13

14. 14 FEEDBACK INCORPORATION  If feedback is unclear, BC Hydro will contact entities and ask for revisions. BC Hydro will NOT make changes to entity feedback without explicit written permission from an entity. Otherwise, feedback forms are taken verbatim and appended to the Assessment Report for the BCUC’s reference.  Comments are evaluated against the following criteria established since Assessment Report No. 1 to see if they identify:  Adverse Reliability Impacts: Less stringent requirements than currently adopted BCUC standards or practices otherwise mandated in utility tariffs or business practices approved or endorsed by the BCUC.  Suitability Assessment (Technical/Administrative): A)Issues with requiring NERC Approval/Participation in order to implement. B)Issues with ongoing provision of information to NERC or WECC due to lack of clarity on reporting instructions, references to undefined processes or reporting tools, etc.. C)References to standards/Glossary terms that are not yet FERC/BCUC approved or otherwise under BCUC assessment. D)Any other issues that would affect an entity’s ability to implement the requirements of a standard/Glossary Term (i.e. Planning Authority/Planning Coordinator input required for which the role(s)/responsibilities are under consideration by the BCUC).

15. 15 FEEDBACK INCORPORATION CONT’D.  Comments that will NOT be considered as part of BC Hydro’s recommendations:  Any issues not falling under the criteria of ‘Adverse Reliability Impact’ or ‘Suitability Assessment’ previously defined.  Examples: Issues with entity functional registrations; Requests to change standard language or Glossary Terms/definitions as the BCUC does not have the authority to draft standards/Glossary Terms or make changes. REMINDER: These comments will still be kept verbatim; just not considered as these are out of scope of the established Assessment Report process. Please discuss with the BCUC separately.  All provided costs are aggregated and summarized in the body of the Report.  Implementation time recommendations are based on entity feedback in combination with FERC approved recommended implementation times.  Implementation times for new Glossary Terms will typically be recommended to coincide with recommended implementation times of associated standards.

16. SOURCES OF INFORMATION BCUC MRS website: http://www.bcuc.com/mrs.aspxhttp://www.bcuc.com/mrs.aspx NERC website: www.nerc.comwww.nerc.com WECC website: www.wecc.bizwww.wecc.biz NERC/WECC hosted standards drafting/implementation and compliance webinars WECC Compliance User Group meetings (CUG/CIPUG) Western Interconnection Forum (WICF) (http://www.wicf.biz/)http://www.wicf.biz/ 16

17. 17 CLOSING SUMMARY  NERC as well as Regional Entities (WECC) develop MRS  FERC must approve a MRS before it is assessed for adoption in B.C.; FERC does NOT have jurisdiction in BC  Every year BC Hydro, with feedback from Registered Entities, reviews each MRS assessing the suitability for adoption in B.C. and files a report with the BCUC.  The BCUC must adopt the MRS assessed in the report unless after a hearing it determines that the MRS is not in the public interest  Assessment Report No. 8 Feedback Due: Friday February 27, 2015

18. 18 QUESTIONS AND ANSWERS

19. www.bchydro.com THANK YOU For further information or questions on Assessment Report No. 8, please contact: BC Hydro Reliability Standards BCHydroReliabilityStandards@bchydro.com Patricia Robertson, Reliability Compliance Manager Patricia.robertson@bchydro.com (604) 455-1831 Vijay Raghunathan, Senior Reliability Compliance Engineer Vijay.raghunathan@bchydro.com (604) 516-8958 Find BC Hydro at :