Welcome to the…. FRCC Quarterly Compliance WebEx Forum August 19-20, 2009

1. Welcome to the….FRCC Quarterly ComplianceWebEx Forum August 19-20, 2009

2. Compliance Tracking System(CTS) FRCC Compliance WebEx ForumAugust 2009

3. Presentation Purpose The following presentation is provided by FRCC Compliance Staff for the Registered Entities to provide a current status of the CTS and the Periodic Reporting through CTS.

4. CTS Status • The CTS is still undergoing enhancements prior to its implementation • Current expected implementation is this Fall

5. Periodic Reporting • Monthly periodic data submittals are expected to begin Fall 2009 • Quarterly periodic data submittals are expected to begin Fall 2009 • Multi-regional group developing common forms for use on the CTS system

6. Up Next…… NERC Compliance Process Bulletins

7. NERC Compliance Process Bulletins FRCC Compliance WebEx ForumAugust 2009

8. Presentation Purpose The following presentation is provided by FRCC Compliance Staff for the Registered Entities to enhance the understanding of NERC 2009 Process Bulletins.

9. Overview • 2009-01FERC Revised Policy Statement • 2009-002Extension of Self-Certification Deadlines • 2009-003Pro Forma Settlement Process • 2009-004Providing Access to and Copies of Evidence • 2009-005Current In-Force Document Data Retention Requirements • 2009-006Interim Approach to Technical Feasibility Exceptions • Location of NERC Process Bulletins

10. 2009-01 Version 1.0 Feb. 6, 2009 • Clarifies Usage and Impact of FERC Revised Policy Statement on Enforcement and FERC Policy Statement on Compliance within ERO Compliance Monitoring and Enforcement Program (CMEP)

11. 2009-01 Version 1.0 Feb. 6, 2009 • Policy Statement on Enforcement 10/20/2005 • Established authority & credits for internal compliance, self-reporting and cooperation • Revised Policy Statement on Enforcement 05/15/2008 • Further defined enforcement authority and types of actions. Clarified Commitment to Compliance • Policy Statement on Compliance 10/16/2008 • Defined Factors for Vigorous Compliance Program and relationship to Penalty Credit

12. 2009-002 Version 1.0 May 19, 2009 • Extension of Self-Certification Deadlines • Self-Certification due dates are fixed • Missed due dates subject to violation(s) • Limited Extensions by Regions • Beyond the Region’s control / not discriminate • Notified in writing of the new deadline

13. 2009-002 Version 1.0 May 19, 2009 • Extension of Self-Certification Deadlines (continued) • Entity Request Extension • Request in writing, 10 days before original deadline • Only for circumstances beyond Entity’s control • Will not risk the reliability of bulk power system • Will not interfere with Regions' implementation of CMEP • CMEP Attachment #1 (4-steps)

14. 2009-003 Version 2.0 June 29, 2009 • Pro Forma Settlement Process for Documentary Requirements • Purpose to reduce administrative burdens and expedite the settlement process • Limited to specific Reliability Standards (Appendix A) with Lower or Medium VRF • Limited to documentation issues not performance issues • Limited to Self-Reports and Self-Certifications

15. 2009-003 Version 2.0 June 29, 2009 • Pro Forma Settlement Process for Documentary Requirements (continued) • No repeat violations • Smaller Settlement Agreement • Penalty based on minimum dollar values in the Base Penalty Amount Table (Appendix A) of NERC Sanction Guidelines • Final penalty adjusted to reflect duration

16. 2009-004 Version 1.0 June 29, 2009 • Providing Access and Copies of Evidence to Regional Entity, NERC, and FERC Staff • Compliance Audits and Compliance Violation Investigation (CVI) • Authority established in Code of Federal Regulations, FERC Order 672 and CMEP • CMEP Attachment 1 – ‘Process for Non-submittal of Requested Data’

17. 2009-004 Version 1.0 June 29, 2009 • Providing Access and Copies of Evidence to Regional Entity, NERC, and FERC Staff • Entity’s right and responsibility to mark CEII information per Section 1500 of Rules of Procedure (RoP) • Each page as appropriate should be visibly marked as ‘Confidential, CEII’

18. 2009-005 Version 1.0 June 29,2009 • Current In-Force Document Data Retention Requirements for Registered Entities • Good management practice to retain all versions of a policy, plan procedure or other singular document • If violation is found, historical documents could affect the duration • Include revision history, identify nature and location of the change on each document

19. 2009-005 Version 1.0 June 29,2009 • Current In-Force Document Data Retention Requirements for Registered Entities (continued) • Retain revision history, log of prior current in-force revisions of the document • Copy of the Entity's data retention policy • Prior versions may be requested to establish duration of non-compliance with the standard • Future Self-Certifications will require retention of evidence

20. 2009-006 Version 1.0 July 1,2009 • Interim Approach to Technical Feasibility Exceptions (TFEs) • Provides guidance concerning the applicability and implementation of certain NERC CIP Reliability Standards and requirements that refer to technical feasibility and/or technical limitations pending the adoption of a permanent program to address TFEs

21. 2009-006 Version 1.0 July 1,2009 • Interim Approach to TFEs (continued) • Formal process coming, mid-September • Form in CTS • Part A: TFE request and indicate what you are going to do to mitigate it and identify the number of assets covered under the TFE • Submit TFE at least 30 days prior to the site visit of audit or spot check

22. 2009-006 Version 1.0 July 1,2009 • Interim Approach to TFEs (continued) • Allowed TFEs for: • CIP-005-1, R2.4, R2.6, R3.1, and R3.2 • CIP-007-1, R2.3, R4, R5.3, R6, and R6.3

23. How to submit a TFE • TFE must include the following: 1. Identification of the NERC Reliability Standard requirements for which the TFE is being asserted; 2. A description of the assets, critical assets, and critical cyber assets affected by the TFE, including vendor documentation detailing specific limitations of relevant equipment; 3. An explanation regarding why the requested exception is necessary; 4. Documentation reflecting the date that the requested exception was approved by the senior manager or delegate(s);

24. How to Submit a TFE (con’t) • 5. A brief description of the mitigating and compensating measures taken by the Registered Entity to address all risks to the reliability of the Bulk Electric System; • 6. A list of any other Region in which the Registered Entity is seeking the requested TFE; and • 7. The time period for which the TFE is requested to remain in place.

25. Key Factors for Considerations • These factors include when “strict compliance” with an applicable requirement: (i) is not technically possible, is operationally infeasible, is precluded by technical limitations, or could adversely affect reliability of the Bulk Electric System to an extent that outweighs the reliability benefits of Strict Compliance with the Applicable Requirement; or • (ii) while technically possible and operationally feasible, cannot be achieved by the date by which the Responsible Entity is required to be in compliance with the Applicable Requirement, due to factors such as scarce technical resources, limitations on the availability of required equipment or components, or the need to construct, install or modify equipment during planned outages; or

26. Key Factors for Considerations (iii) would pose safety risks or issues that outweigh the reliability benefits of Strict Compliance with the Applicable Requirement; or (iv) would conflict with, or cause the Responsible Entity to be non-compliant with, a separate statutory or regulatory requirement applicable to the Responsible Entity, the Covered Asset or the related Facility that must be complied with and cannot be waived or exempted; or Registered Entity’s plans to mitigate or compensate for any risk to reliability of the BES associated with the assertion of a TFE

27. Location of NERC Process Bulletins • The NERC Process Bulletins are located on NERC’s website at the following URL address, under the Public Notices area: http://www.nerc.com/page.php?cid=3|22

28. Up Next…… FAC-003-1 FAQTransmission Related OutagesEntity Responsibility

29. FAC-003-1 FAQTransmission Related Outages FRCC Compliance WebEx ForumAugust 2009

30. Presentation Purpose The following presentation is provided by FRCC Compliance Staff for the Registered Entities to discuss #2008-001 NERC Public Process Announcement and a draft FAQ to provide the FRCC expectations concerning evidence requirements concerning a reportable transmission outage caused by vegetation associated with FAC-003-1.

31. FRCC FAQ Web Page

32. FRCC FAC-003 Guidelines for Registered Entity Preparing Evidence for a Self-report Concerning Vegetation Management DRAFT

33. FRCC FAC-003 Guidelines for Registered Entity Preparing Evidence for a Self-report Concerning Vegetation Management b) Documentation of recent patrols or inspections for the line which the incident occurred. Also patrols or inspections for the line immediately after the incident. c) The Plan and Profile drawing of the spans where the incident occurred. d) Conductor sag calculations for the following conditions: normal, emergency, and load at time of incident. e) Weather conditions at time of incident- ambient temperature, wind speed and direction f) Easement document –easement width & property owner restrictions g) Control Center data i) Relay operation reports ii) Time the transmission line was returned to service iii) Load information just prior to the time of incident-what is the SCADA normal & emergency rating and alarms for the transmission line iv) Did a re-dispatched occur due to the loss of the transmission line and the consequence of the re-dispatch? v) Switching logs and operator actions taken as a result of the incident for the full duration of the line outage (written and/or electronic). vi) Fault location (in miles) from connecting line substations vii) Two year outage history of the transmission line which the incident occurred. DRAFT

34. FRCC FAC-003 Guidelines for Registered Entity Preparing Evidence for a Self-report Concerning Vegetation Management viii) All Reliability Coordinator conversations, discussions or directives relating to the outage of this transmission line. ix) Any other actions caused by the outage of this transmission line such as voltage problems, abnormal loadings on other transmission lines, impact to customers fed by the transmission line or other customer related problems in the event area. 4) Interviews a) Key Vegetation Management personnel involved with the incident b) Responding line department supervision to the incident c) Vegetation Management Inspection supervisor(s) – contractor and/or company Provide comments to compliancemanager@frcc.com by September 15, 2009. DRAFT

35. Overview Draft FAQ – Guidance for Preparing Evidence • Immediate Action • Follow-up Field Investigation • Compilation of Documents • Interviews NERC Compliance Process #2008-001 • FRCC 48 - Hour Reporting form

36. FAQ – Guidance for Preparing Evidence Immediate Action – • Leave debris associated with the incident at the incident site including the pruning or removal of the tree(s) • Report within 48 hours to the FRCC if the outage is a Category 1 or Category 2

37. FAQ – Guidance for Preparing Evidence Follow-up Field Investigations • Photos of the incident site • Area, towers/poles, tree(s), damage, etc • Document the incident site • Key measurements of components involved in incident • Compilation of documents relating to the incident site • Work documents, relay reports, drawings, inspections • Interviews of key personnel

38. NERC Compliance Process #2008-001 • NERC encourages Transmission Owners to self-report all Category 1 and 2 transmissions outages related to vegetation to FRCC within 48 hours using the FRCC reporting form. • FRCC will use CTS and a FAC-003-1 Vegetation Transmission Outage form for this purpose. • FRCC will use CTS for the quarterly reporting, too.

39. Up Next…… Whitepapers on:PRC-005-1&CIP-004-1

40. Whitepapers on NERC StandardsSummary Reports for Violations of Reliability Standards: Standard PRC-005 System Protection Maintenance and Testing Standard CIP-004 Cyber Security – Personnel and Training

42. PRC-005-1 Analysis As of July 22, 2009, Source: Summary Report for Violations of Reliability Standard PRC-005 – System Protection Maintenance and Testing - draft Board of Trustees Compliance Committee August 4, 2009

43. PRC-005-1 Analysis

45. CIP-004-1 Analysis

46. CIP-004-1 Analysis

47. References • PRC-005 Analysis (draft)http://www.nerc.com/docs/bot/botcc/ITEM_3_Supplement_PRC-005_Analysis_(revised).pdf • CIP-004 Analysis (draft)http://www.nerc.com/docs/bot/botcc/ITEM_3_Supplement_CIP-004_Analysis.pdf

48. Up Next…… Break

49. 10 minutes till the forum resumes

50. 9 minutes till the forum resumes