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Reliability Coordination Strategy Analysis and Recommendations Board of Directors Meeting December 6, 2007.

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Presentation on theme: "Reliability Coordination Strategy Analysis and Recommendations Board of Directors Meeting December 6, 2007."— Presentation transcript:

1 Reliability Coordination Strategy Analysis and Recommendations Board of Directors Meeting December 6, 2007

2 Topics Proposed Board Motions Strategy Objectives WSM Integration WSM and RC Hosting Strategies Governance and Facility Options Budget Implications Termination of Funding Agreements

3 RC Strategy Proposed Motions

4 WECC Reliability Coordination Strategy Governance Motion Approve the proposed Charter of the Reliability Coordination Committee (RCC) and request that the Chair of the Board of Directors provide recommendations for the members of the RCC as soon as practical.

5 WECC Reliability Coordination Strategy Facility Motion The two Reliability Coordination Center facilities shall be leased and operated by the WECC and be separate and independent from any WECC member. The two Centers shall each include: RC Control Room Data center to house the Westwide System Model and other operating tools Offices for RC support staff

6 WECC Reliability Coordination Strategy Facility Location Motion One of the two Reliability Centers will be located in the Vancouver, Washington/Portland Oregon area. The second Center location will be located in the greater Denver, Colorado area.

7 WECC Reliability Coordination Strategy 2008 Budget Motion The WECC CEO is authorized to borrow up to $6,000,000 to fund the Reliability Coordination Strategy during the 2008 Budget Year. Said funds will be borrowed incrementally on an as needed basis. The borrowed funds will be paid back during Budget Years 2009 and 2010 unless otherwise determined by the WECC Board of Directors.

8 WECC Reliability Coordination Strategy Termination of Funding Agreements The WECC CEO is authorized to provide notice to the three current hosts of the WECC Reliability Coordination Centers that the Reliability Coordination funding agreements will be terminated. The date of termination shall be determined by the WECC CEO based on the implementation schedule of the WECC Reliability Coordination Strategy.

9 RC Strategy Objectives

10 Strategy Objectives WECC-Wide RC Function Comply With All NERC & WECC Criteria 2 Centers, 2 Teams, Geographically Separated Center Redundancy (Mutual Backup) Common Tools Common Training Separation and Independence from any Host

11 Strategy Objectives Focus on Reliability, Not Enforcement RCs Report to the WECC Director of Reliability Coordination Recommended Minimum Staffing Configuration Shift Consists of Operator and Operating Engineer at Each Center 2 Teams = 34 FTEs Total

12 RCSTF Objectives Provide Cost-Effective RC Tools and Facilities without Gold Plating Create an RC Platform That Can Expand as Necessary to Meet Future Requirements Establish a Flexible RC Culture Retain, Hire, and Train the Best Staff Obtainable with Competitive Compensation Packages

13 RC Sites/Team Configuration

14 Number of RC Sites / Team Configuration Components Summary 1.2 RC Sites, Geographically Separated 2.One RC Team per Site (17 FTEs) 3.Defined Minimum Staffing Level (34) 4.Each Team Responsible for a Specific Geographical Sub-Region but Both Can Monitor and Study the Entire Western Interconnection

15 VOTING CLASSYESNOABSTAIN TRANSMISSION PROVIDERS 2200 TRANSMISSION CUSTOMERS 2000 STATE and PROVINCIAL 200 TOTALS 4400 OC Voting Record – Number of RC Sites/Team Configuration

16 Integration of WSM into the RC Strategy

17 Board RC Motions – WSM & Tools Merge the application tools proposed in the West-wide System Model (WSM) and the operating tools defined in the Reliability Center Strategic Principles (RCSP). Provide for the procurement of bids and recommendation of a vendor to provide the IT/communications infrastructure for support of the RCs.

18 Status of Westwide System Model Host RCSTF Developed and Issued an RFP for the WSM Host and RC Team Hosts in February 2007 Electronic Data Systems (EDS) Was the Winning Bidder for WSM Hosting WECC Board Directed RCSTF to Begin Negotiations WECC and EDS Have Not Come to Agreement on Specific Issues Legal, Technical, and Cost

19 WECC WSM Host Option In September 2007, RCSTF Requested WECC Staff to Investigate Option of WECC Hosting WSM & RC Tools Facilities Would Include: (2) Data Centers for WSM and RC Tools Offices for WSM and RC Tools Support Staff

20 WSM & Tools Support Staff The WSM is an Energy Management System (EMS) WECC is Currently Authorized to Hire 3 EMS Positions Eric Whitley – EMS Manager Hired Sept 07 WECC is Currently Proposing 14 Total EMS Staff if WECC Hosts and 12 EMS Staff if EDS Hosts Office Facilities for the EMS Team will be Required

21 WSM NetApps Support Understanding Operational Reality Makes Network Applications Relevant EMS Support Staff Need to Understand the Product the Operators Require Operators Get a Better Understanding of How the Applications Work and Receive Exceptional Training Common EMS Tools Improve Situational Awareness for Both Centers A Well Designed RC Control Center is Key to Fostering a Professional and Credible RC Role

22 RC & WSM Hosting Scenarios

23 Hosting Scenarios as Presented to the OC in October 2007 OptionWSM HostRC Host EMS Office Host 1WECC 2 BPA + CAISOWECC 3Vendor BPA + CAISOWECC

24 New Information BPAs Attorneys Have Liability Concerns These Concerns Must Be Addressed Prior to BPA Becoming a Long Term RC Center Host CAISO Has Reported That it Will Not Host Non-CAISO RC Employees WAPA is Not Interested in Hosting an RC in the Future and is Currently Working with WECC to allow the RDRC to Vacate their Facilities as soon as Practical

25 Potential layout of RC Control Centers

26 Reliability Coordination Governance

27 RC Governance Options A.WECC Management Model B.Contract Corporate Provider Governance Model C.Host Organization Model D.WECC RC Governance Committee Model (RCGC)

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32 WECC Management Model Direct Management of RC Function by WECC Management Combining WECC EMS Staff, WSM, and RC Staff in Same Facility More Flexibility to React In Dynamic Circumstances There are No Perfect Contracts

33 Corporate Provider Model PNSC Model Single Separate Corporation Provides RC Services through Contract with WECC Contract Determines Obligation of All Parties Governed by a Board of Directors Reliability Coordinators are Employees of the Corporation

34 Corporate Provider Model Benefits Independence of RC Functions from Compliance Monitoring Focus Entirely on Reliability Bridge Current Reliability Coordinators Board of Directors Experience and Obligations to the Corporation Separate Funding – No Competition with other Efforts or Budget Constraints

35 Corporate Provider Model Benefits Potential for Audit to be Led by WECC Instead of NERC Smaller Organization More Flexible and Employees Feel Ownership Option to Contract with a Host Site

36 Corporate Provider Model Cons Need for Liability Protection Requires Contract Development Between Entities Contract May Reduces Ability to Make Quick Changes Smaller Staff – Less Assistance to Address Short-Term Needs

37 Host Organization Model Host Provides Access to Knowledgeable Staff and Engineering Expertise WECC Hosting Option is a Duplication of Efforts with Communication Systems, Security and other Services Provided by the Host Contractor Model would Allow the CMRC Operators to be CISO Employees.

38 Host Organization Model Large Organization Allows More Opportunities for RC Employees

39 WECC Committee Governance Model Places all RCs Under WECC Umbrella No Contract to Negotiate with Independent Host Oversight and Management by Independent Board Committee Reporting Directly to the Board

40 RC Governance Motion Approve the Reliability Coordination Governance Committee (RCGC) Concept that Included the Following Principles: Devoted to Reliability and Management of the Reliability Coordination Function of the Western Interconnection The RCGC Includes Highly Technical Experts In System Operations. The RCGC Has A Fiduciary Responsibility For the Effective Operation of the RCS.

41 RC Governance Motion Includes the Duties of Loyalty and Care for the RC Function Independence and Separation From Other WECC Functions All Decisions Made By the RCGC and The RCs Would Be Transparent Except for Those Requiring Confidentiality Such As: Personnel Actions, Legal And Critical Infrastructure Issues All RC Staff Would Be WECC Employees

42 OC Vote – RC Governance VOTING CLASSYESNOABSTAIN TRANSMISSION PROVIDERS TRANSMISSION CUSTOMERS 1151 STATE and PROVINCIAL 101 TOTALS25162

43 Minority Opinions The language All RC staff would be WECC employees was not stricken Would like to have voted on the Option 2 which is the complete independent corporation instead of this option Do not understand how the Board is responsible to regulate [mandatory compliance] and at the same time will separate the RC function

44 Minority Opinions If the Board goes forward with this option all RC staff will be forced to be WECC employees which could lead to losing the current RC operators With this governance model WECCs ability to recruit RC operators maybe reduced

45 Board RC Strategy Governance Motion

46 WECC Reliability Coordination Strategy Governance Motion Approve the GNCs proposed Charter of the Reliability Coordination Committee (RCC) and request that the Chair of the Board of Directors provide recommendations for the members of the RCC as soon as practical.

47 RC Facility Options

48 A.Vendor Turn-Key Facility B.Existing Hosts (BPA and CAISO) C.WECC-Leased and Operated Facility

49 Vendor Turn Key Option Pros: Fewer WECC Resources Vendor Takes Responsibility for Locating Facility and Completing Installation Cons: Cost Contract Development Timing

50 Existing Host Option Assumption: Rules Of Conduct Prevent Discriminatory Influence Over A Reliability Coordinators Pros: Informal (Non-decisional) Interaction Increases Grid Awareness Large Grid Operator Host Has Extensive And Unique Technical Expertise in Grid Operation Increased Hedge Against Risk Of Major Power System Disturbances Cons: Concern With Potential Conflict Of Interest. Potential Increased Host Liability

51 Existing Host Option Advantage of large grid operator environment, infrastructure and expertise. Direct participation in RC decisions and responses would be highly restricted. Generic discussions with host on all general issues of grid reliability and characteristics encouraged. Provides additional layer of infrastructure backup and expertise in unanticipated emergency situations.

52 WECC Host Facility: Pros Lowest Overall Cost ($11M Less) Central Location for all Data and RC Functions Reduced Response Time for EMS Staff RC Staff, EMS Support Staff, Training Staff, and Data Center at Same Location Create Synergies Low Cost Scalability Center Customized to Needs of Teams

53 WECC Host Facility: Pros Physical Independence from Utility Host RC1: 7,500 SF Facility for Data Center, RC, & EMS Office RC2: 6,000 SF Facility for Data Center & RC State of the Art Control Room Large Conference Room for Staff, Committee, Task Force, & Work Group Meetings

54 WECC Host Facility: Pros Room for Expansion Attractive Locations with Freeway and Airport Access Data Center and Control Room Construction would be Contracted Out to Expert Vendors

55 WECC Host Facility: Cons Expertise Required in Managing a Data Center

56 RC Facility Option Motion To Approve the Option Where the Two RC Host Sites Would be WECC Operated

57 OC Vote – RC Facility Option VOTING CLASSYESNOABSTAIN TRANSMISSION PROVIDERS 1453 TRANSMISSION CUSTOMERS 1302 STATE and PROVINCIAL 200 TOTALS2955

58 Minority Opinions RC Staff Retention Concerns Option Does Not Leave an Option for a Large Grid Operator to Host the RC Centers

59 Board RC Strategy Facility Motion

60 WECC Reliability Coordination Strategy Facility Motion The Two Reliability Coordination Center facilities shall be leased and operated by the WECC and be separate and independent from any WECC member. The two centers shall each include: RC Control Room Data center to house the Westwide System Model and other operating tools Offices for RC support staff

61 RC Facility Locations

62 RC Facility Location Motion The WECC Operating Committee Directs The Reliability Coordination Strategy Task Force To Identify the Best RC Facility Locations These Location Choices Will Be Based On: Retention Of Employees Availability Of A Skilled Labor Pool Geographic Separation Cost Quality Of Life Easy Access

63 OC Vote – RC Facility Location VOTING CLASSYESNOABSTAIN TRANSMISSION PROVIDERS 2100 TRANSMISSION CUSTOMERS 1200 STATE and PROVINCIAL 200 TOTALS3500

64 RCSTF Selection - Facility Location The Majority of the RCSTF Selected: Vancouver, Washington Loveland, Colorado An In Depth Analysis Was Not Performed Decision was Primarily Determined Based on Staff Retention, Costs, and Availability of Candidates

65 Board RC Strategy Facility Location Motion

66 WECC Reliability Coordination Strategy Facility Location Motion One of the two Reliability Centers will be located in the Vancouver, Washington/Portland Oregon area. The second Center location will be located in the greater Denver, Colorado area.

67 2008 WECC Budget Implications

68 WECC Operated Facility Option Saves $11M over 5 Year Period Versus EDS WSM Host Option WECC Option Represents a Front Loaded Capital Investment $5.9M Over 2008 RC Budget EDS Option Cost Can Be Spread Easier to Meet WECC Budget Constraints

69 RC Strategy Cost Comparison - Summary - All In Description Total Initial Board Proposal - July 2006$13,389$11,800$60,601 Current Approved 2008 Budget ( Estimates)$12,155$16,571$64,700 Projected Estimate - WECC Option - November 2007$18,008$13,975$62,227 Projected Estimate - EDS WSM Host - November 2007$20,694$16,051$73,525 In Thousands $

70 WECC Budget Impact – All In ($1,000) Description 2008 Projected Estimate WECC Option$18,008 Current Approved RC Budget$12,155 Current Approved Statutory WECC Budget$26,819 Cost Increase to Membership$5,853 % Increase to Statutory Budget22%

71 % Differential WECC Option Over Current Budget Projections

72 Description Total Westwide System Model - Areva$1,639$100$104$2,051 Infrastructure - Data Center and RC Tools, EMS Office and EMS salaries$4,740$3,058$2,578$15,535 Staffing - travel, training, total RC staffing$7,845$6,103 $32,261 Transition - relocation, retention, overlapping$0$3,417$0$3,417 RC Site - control room$3,783$1,294 $8,962 Total$18,007$13,974$10,081$62,226 RC Budget Costs by Category ($1,000s)

73 RC Budget 2008 Financing Option

74 Board RC Strategy Facility Motion

75 WECC Reliability Coordination Strategy 2008 Budget Motion The WECC CEO is authorized to borrow up to $6,000,000 to fund the Reliability Coordination Strategy during the 2008 Budget Year. Said funds will be borrowed incrementally on an as needed basis. The borrowed funds will be paid back during Budget Years 2009 and 2010 unless otherwise determined by the WECC Board of Directors.

76 Board RC Strategy Termination of Funding Agreements

77 WECC Reliability Coordination Strategy Termination of Funding Agreements The WECC CEO is authorized to provide notice to the three current hosts of the WECC Reliability Coordination Centers that the Reliability Coordination funding agreements will be terminated. The date of termination shall be determined by the WECC CEO based on the implementation schedule of the WECC Reliability Coordination Strategy.


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