1. Averting Disaster - Grid Reliability Issues and Standards National Energy Restructuring Conference April 1, 2004 Washington, DC

2. NERC Actions to Address the August 14, 2003, Blackout National Energy Restructuring Conference April 1, 2004 Washington, DC

3. 3 NERC Control Areas

4. 4 1:31:34 p.m. August 14, 2003 What Happened? 765kV DC Voltage Montreal Ottawa Toronto Detroit Cleveland Akron Canton Buffalo New York Pittsburg Toledo 2:02 p.m.3:05:41 to 3:41:33 p.m.3:45:33 to 4:08:58 p.m.4:08:58 to 4:10:27 p.m.4:10:00 to 4:10:38 p.m.4:10:40 to 4:10:44 p.m.4:10:44 to 4:13:00 p.m.

5. 5 Investigation Organization NERC Steering Group MAAC/ECAR/NPCC Coordinating Group MAAC ECAR NPCC MEN Study Group Project Planning and Support Sequence of Events Data Requests and Management Investigation Team Lead System Modeling and Simulation Analysis NERC & Regional Standards/Procedures & Compliance Transmission System Performance, Protection, Control Maintenance & Damage Operations - Tools, SCADA/EMS Communications Op Planning System Planning, Design, & Studies Root Cause Analysis Cooper Systems Generator Performance, Protection, Controls Maintenance & Damage U.S – Canada Task Force Vegetation/ROW Management Frequency/ACE Restoration Investigation Process Review

6. 6 Key Findings of Investigation

7. 7 Causes of the Blackout ● Inadequate Situational Awareness ● Failure to manage tree growth in ROWs ● Failure of Reliability Coordinators diagnostic support

8. 8 Violations of NERC Reliability Standards Failure to return system to safe operating state within 30 minutes Failure to notify others of impending emergency State estimator was not used Inadequate training Reliability coordinator did not notify others Reliability coordinator did not have adequate monitoring capability

9. 9 Key Findings ● Several violations ● Compliance monitoring process is inadequate ● Differing interpretations ● Repeats past mistakes ● Data deficiencies in models ● Planning inadequate ● Technologies inconsistent ● Communications not effective

10. 10 NERC Guiding Principles ● Specific information on all violations ● Improve compliance ● Greater transparency to violations ● Work closely with FERC, states, provinces ● Ensure public interest is met

11. 11 NERC Blackout Recommendations ● Corrective actions ● Strategic initiatives ● Technical initiatives

12. 12 Corrective Actions ● Specific actions to correct the direct causes of the blackout ● Certify actions completed by June 30 ● Experts to be available to assist

13. 13 Strategic Initiatives ● Readiness audits ● Performance audits ● Vegetation-related outage reporting ● Recommendations implementation tracking

14. 14 Readiness Audits ● Audit all control areas and reliability coordinators ● Conduct every 3- years ● Reports to the board

15. 15 Performance Reviews ● Modify NERC Compliance Enforcement Program  Regions to submit results to NERC  Provide list of non-compliant entities ● Regular confidential reports to the Board  Specific violations  Results of audits

16. 16 Vegetation Outage Reports ● Transmission owners to report tree contacts to Regions (230+ kV) ● Regions report to NERC ● Use WECC as model ● Regions to conduct annual vegetation management surveys

17. 17 Recommendations Tracking ● NERC and Regions will track:  Implementation of recommendations  Compliance audits  Lessons learned from system disturbances  Use successful regional processes as model

18. 18 Technical Initiatives ● Operator & reliability coordinator emergency response training ● Reactive power & voltage control ● Cascade mitigation ● RC & CA responsibilities ● Real-time operating tools ● Restoration review ● Time-synchronized measurements ● Reevaluate system design, planning & operating criteria ● System modeling & data exchange standards

19. 19 So Where Are We? ● NERC Steering Group – technical investigation is ongoing ● Recommendations approved by NERC standing committees, stakeholders, and Board of Trustees ● Implementing recommendations ● Finalize technical report this spring

20. 20 Issues to be Resolved ● Role of FERC, NRCan ● Non-jurisdictional entities ● Funding: resources and $$$ ● Migrating old standards to new ● Recommendations in final report ● Voluntary vs. mandatory reliability standards or: Will reliability legislation ever pass??

21. NERC Actions to Address the August 14, 2003, Blackout National Energy Restructuring Conference April 1, 2004 Washington, DC