NERC TPL-001-4 Standard Overview Attachment K Quarter 3 Stakeholder’s Meeting September 29, 2016

Overview Areas Background New NERC TPL Standard 2016 TPL Plan and Status Update 2015 Planning Assessment Results Compliance Monitoring and Enforcement

Common Acronyms BES – Bulk Electric System ERO – Electric Reliability Organization FERC – Federal Energy Regulatory Commission NERC – North American Electric Reliability Corporation WECC – Western Electricity Coordinating Council RE – Regional Entity TPL – Transmission Planning (Standards Family)

Why the need of Reliability Standards? November 9, 1965: Northeast Blackout resulting in loss of power to 30 million people July 13-14, 1977: Blackout of New York City resulting in loss of power to 9 million people and widespread looting, arson and rioting July 2-3, 1996 & August 10, 1996: Western North American Blackouts impacting areas across Western Canada, Western United States and Northwest Mexico, resulting in loss of power to more than 7.5 million people August 14, 2003: Northeast/Midwest Blackout, including Ontario, Canada, resulting in loss of power to 50 million people (largest to date)

Actions taken after the 2003 Blackout? 2005: U.S. Energy Policy Act of 2005 creates the Electric Reliability Organization (ERO) 2006: Federal Energy Regulatory Commission (FERC) certified NERC as the ERO; Memorandum of Understanding (MOUs) with some Canadian Provinces 2007: North American Electric Reliability Council became the North American Electric Reliability Corporation (NERC); FERC issued Order 693 approving 83 of 107 proposed reliability standards; became mandatory and enforceable

What are the Reliability Standards? Reliability Standards are the planning and operating rules that electric utilities follow to ensure the most reliable system possible Standards are developed by the industry using a inclusive process managed by the NERC Standards Committee Committee is facilitated by NERC staff and comprised of representatives from many electric industry sectors NERC has eight Regional Entities (RE’s) across the United States and Canada The RE’s are responsible for compliance monitoring and enforcement of the reliability standards PacifiCorp’s RE is the Western Electricity Coordinating Council (WECC)

Who develops the Reliability Standards? FERC Approves/denies following full NERC process NERC Standard Action Request (SAR) Board of Trustees (BOT) approves/denies continent wide (NERC) and regional (WECC) standards Standard Drafting Teams (SDT) Industry involved approval process WECC Oversees regional enforcement of reliability standards Oversees the development of regional standards (more stringent than continent standards) BOT approves regional (WECC) standards Committee only approves Criterion FERC NERC WECC

Who are NERC’s Regional Entities? WECC: Western Electricity Coordinating Council MRO: Midwest Reliability Organization SPP: Southwest Power Pool TRE: Texas Regional Entity NPCC: Northeast Power Coordinating Council RFC: ReliabilityFirst Corporation SERC: SERC Reliability Corporation FRCC: Florida Reliability Coordinating Council

Move to the new NERC TPL-001-4 Standard NERC standard TPL-001-4 refers to Transmission System Planning Performance requirements – became fully effective and enforceable on January 1, 2016 The new standard officially replaced the four individual standards previously in place – i.e., TPL-001-0.1, TPL-002-0b, TPL-003-0b and TPL- 004-0a TPL-001-0.1 was for performance under normal conditions (Category A) TPL-002-0b was for loss of a single BES element (Category B) TPL-003-0b was for loss of two or more BES elements (Category C) TPL-004-0a was for loss of two or more BES elements (Category D or Extreme Events) Overall, the new standard was expanded over the previous standards with increased performance criteria and requirements – it has 65 requirements and sub-requirements PacifiCorp is one of the first utilities in the industry to adopt the standard in its Transmission Planning Assessment performed in 2015 – results of which are summarized in another slide

TPL-001-004 Standard Requirements R1 – Each Transmission Planner and Planning Coordinator shall maintain system models within its respective area for performing the studies needed to complete its Planning Assessment… R2 – Each Transmission Planner and Planning Coordinator shall prepare an annual Planning Assessment of its portion of the BES… R3 – For the Steady-State portion of the Planning Assessment, each Transmission Planner and Planning Coordinator shall perform studies for the Near-Term and Long-Term Transmission Planning Horizons… R4 – For the Stability portion of the Planning Assessment, each Transmission Planner and Planning Coordinator shall perform the Contingency analysis listed in Table 1… R5 – Each Transmission Planner and Planning Coordinator shall have criteria for acceptable Steady-State voltage limits, post-Contingency voltage deviations, and transient voltage response for its system… R6 – Each Transmission Planner and Planning Coordinator shall define and document, within their Planning Assessment, the criteria or methodology used in the analysis to identify System instability… R7 – Each Planning Coordinator, in conjunction with each of its Transmission Planners, shall determine and identify each entity’s individual and joint responsibilities for performing the required studies… R8 – Each Transmission Planner and Planning Coordinator shall distribute its Planning Assessment results to adjacent Planning Coordinators and adjacent Transmission Planners… Each Requirement has multiple Sub-Requirements – 57 in total

Some new requirements of TPL-001-4 Spare Equipment Strategy R2.1.5 requires an annual study of impacts for the loss of major equipment, such as power transformers, that do not have a spare unit available and have a lead time of one year or more – studies shall be performed for the P0, P1 and P2 categories shown in Table 1 with the identified equipment out of service Short Circuit Analysis R2.3 requires a short circuit analysis to be conducted annually within the Near-Term Transmission Planning Horizon to determine if circuit breakers have interrupting capability for faults they would be expected to interrupt R2.8 requires a Corrective Action Plan to address circuit breakers subject to short circuit interrupting duty levels that exceed their equipment rating Non-consequential Load Loss R2.7.2 cites that if situations arise that are beyond the control of the Transmission Planer or Planning Coordinator that prevent implementation of a Corrective Action Plan in the required timeframe, it is permitted to utilize Non-Consequential Load Loss and curtailment of firm Transmission Service (≤ 75 MW) to correct the situation that would normally not be permitted in Table 1 – this grace period is in place for five years from the date the standard was approved in 2015 Protection System Studies (R3.3.1) R3.3.1 requires simulating the removal of all elements that the protection system and other automatic controls are expected to disconnect for each Contingency without operator intervention – includes RAS and other protection systems with automatic control

PacifiCorp’s TPL Study Schedule and Status TPL Study Status Study Plan draft completed March 17, 2016 Study Methodology draft completed April 22, 2016 Kickoff meeting held April 16, 2016 10 Base Cases completed for Steady-State analysis in June 2016 – four for PACE and six for PACW PACW Bases Cases – 2017 summer peak, 2017-2018 winter peak, 2021 summer peak, 2021-2022 winter peak, 2018 light spring and 2026 summer peak (Long-Term) PACE Base Cases – 2017 summer peak, 2021 summer peak, 2018 light spring and 2026 summer peak (Long-Term) 3 Base Cases for PACE and PACW to perform Stability Analysis – 2017 summer peak, 2018 light spring and 2026 summer peak (Long-Term, if necessary) Simulations are currently being run for Steady-State base cases Stability analysis will be performed based upon the results of the Steady-State simulations Short-circuit study is completed – some over-duty breakers found Analysis for extreme events, sensitivity studies and loss of major equipment without spares will proceed at the conclusion of the Steady-State analysis Study team is targeting early November 2016 to deliver preliminary reports for PACE and PACW PacifiCorp's 2016 NERC TPL Study Schedule Task Name Target Completion Dates Duration Develop Study Plan 3/17/2016 1 Week Develop Study Methodology 4/8/2016 2 Weeks Study Kickoff 4/15/2016 Review WECC Regional Performance Criteria and PacifiCorp's Thermal and Voltage Criteria 4/22/2016 Develop and Finalize Base Cases 6/21/2016 4 Weeks Develop Contingency Definition Files 6/30/2016 Develop and Send Preliminary Contingency Description to Adjacent Utilities Run Simulation and Summarize Results 9/1/2016 10 Weeks Run Simulation and Summarize Results for Sensitivity and Spare Equipment, etc. 9/20/2016 Report Write-up and File Documentation 11/1/2016 Operating procedures Drafting, PRC-023 R6 Reporting 12/1/2016 8 Weeks

Results of the 2015 Planning Assessment Contingency Studies Performed Activity Description PACE PACW Total Planning Events Studied for Steady-State Analysis 465,279 46,116 511,395 Transient Stability Contingencies Studied for Planning Events 125 152 277 Extreme Events Studied for Steady-State Analysis 16 9 25 Extreme Events Studied for Stability Analysis 6 12 Sensitivity Cases Studied for Steady-State Analysis 1 3 4 Sensitivity Cases Studied for Stability Analysis 5 Results of Contingency Studies   Activity Description Corrective Action Plans PACE PACW Total Steady-State Analysis 17 3 20 Stability Analysis 1 Extreme Events from Steady-State Analysis Extreme Events from Stability Analysis Sensitivity Cases from Steady-State Analysis Sensitivity Cases from Stability Analysis Spare Equipment Analysis Short Circuit Studies 7 Notes: 1. Deficiencies Identified for Steady-State Analysis of P1-P7 Planning Events: 33 Total (PAVE 13, PACW 20) 2. Deficiencies Identified for Stability Analysis of Contingencies Studied for Planning Events: 1 Total (PACE 0, PACW 1) 3. Operating Procedures are put in place to address deficiencies until corrective projects are placed in service 4. PacifiCorp has a total of 38 Operating Procedures in place to address TPL issues (PACE 11, PAW 27)

Compliance Monitoring and Enforcement WECC, with delegated authority from NERC, is the Regional Entity responsible for compliance monitoring and enforcement for the Western Region of the United States WECC provides the environment for development of reliability criteria, occasional regional variances, and coordination of the operating and planning activities of its members NERC is the driving force for developing new standards through its process of an Open Call for Standard Drafting to get team members from its Regional Entities memberships – FERC reviews and approves new and modified NERC Standards WECC provides audit oversight for compliance with NERC Standards for Critical Infrastructure Protection and Operations and Planning Standards NERC has a three year auditing cycle for its TPL Standards – the next audit of PacifiCorp’s TPL compliance is scheduled for 2019

NERC TPL-001-4 Standard Overview Questions?