Determine Facility Ratings, SOLs and Transfer Capabilities An Overview of the Set of Proposed Standards Paul Johnson Chair of the Determine Facility Ratings Standard Drafting Team

Presentation Overview Proposed Standards Highlights of Standards Key Requirements & Functions Responsible Challenging Definitions Controversial Issues V0 Retirements Effective Dates Questions

6 Standards Document Facility Rating Methodology Develop and Communicate Facility Ratings Document SOL Methodology Develop and Communicate SOLs Document Transfer Capability Methodology Document and Communicate Transfer Capabilities Some of these standards are ‘refinements’ or ‘clarifications’ of existing V0 Standards – and some are new. For example – there is a V0 Standard on Facility Ratings, but the Version 0 Standard includes some requirements that don’t align with the way in which we do business. For example – FAC-004-0 requires the Facility Owner to “document its methodologies used to determine electrical facility and equipment ratings.” The Facility Owner doesn’t necessarily ‘determine’ its equipment ratings – in many cases, the Facility Owner ‘adopts’ the equipment ratings provided by the manufacturer so that the warranty will remain in effect. The proposed standard requires the Facility Owner to identify how the equipment rating is determined but doesn’t require the owner to develop an equipment rating methodology. Under the proposed standard, it is sufficient for the owner to say that the equipment rating is based on the manufacturer’s specifications. The proposed standards apply to entities that both plan and operate the BES.

Facility Ratings Methodology Respects most limiting equipment rating Identify method of determining rating Consideration of: Manufacturer’s ratings Design criteria Ambient conditions Operating limitations Other assumptions V0 only requires normal & emergency ratings & doesn’t identify generators End users need a ‘range’ of limits, only some of which are ‘normal’ and ‘emergency’ We don’t have time go to over all the details – so these are just highlights of the requirement to document the Facility Ratings Methodology. If you compare the V0 standards to the proposed standards, you’ll see that V0 doesn’t specifically identify generators – and V0 only requires developing normal and emergency ratings – in reality, we develop and use a wide variety of ratings such as 2 hour ratings, in addition to normal and emergency ratings. The proposed standards require that the methodology for developing all facility ratings be documented – and allows the compliance monitor to review more than just the normal and emergency ratings.

System Operating Limits Methodology Cannot exceed Facility Rating How to identify IROLs In pre and post contingency state SOLs provide: BES system stable (transient, dynamic, voltage) Facilities within Facility Ratings Facilities within thermal, voltage & stability limits Cascading outages & uncontrolled separation shall not occur Again – these are just highlights of the standard. Note that there aren’t any V0 standards that specify criteria for developing the SOLs used in the operating horizon. V0 does require that TOPs have policies and procedures that address SOLs and IROLs, but there are no requirements to identify what criteria these SOLs and IROLs must meet. V0 has no criteria for developing SOLs used in operations horizon

Which SOLs are Also IROLs? Some IROLs can be identified in advance – some can only be identified in real-time An IROL is an SOL that, if violated under certain conditions, could lead to one or more of the following: Cascading outages Uncontrolled separation Instability V0 doesn’t require documenting methodology for determining IROLs Over the past few years there has been quite a bit of attention paid to IROLs and IROL violations. Requiring RCs and PAs to document the methodology used to identify the subset of SOLs that are also IROLs should help with this effort.

Transfer Capabilities Methodology Respect all SOLs Consideration of: Transmission system topology System demand Generation dispatch Current and projected transmission uses Not all Regions require the development of Transfer Capabilities. The requirements in this standard apply only to RCs and PAs who are in Regions that require Transfer Capabilities. V0 has no criteria for developing Transfer Capabilities

Key Requirements & Responsible Functions Methodology Who Has or Develops? Who Sees or Receives? Facility Ratings Gen Owners Trans Owners PAs TPs RCs TOPs System Operating Limits TSPs Transfer Capabilities RROs

Key Requirements & Responsible Functions Product Who Develops? Who Receives? Facility Ratings Gen Owners Trans Owners PAs TPs RCs TOPs System Operating Limits PAs, TPs RCs, TOPs TSPs Transfer Capabilities RROs

Proposed Changes to V0 Definitions Cascading Outages Contingency Interconnection Reliability Operating Limit (IROL) We’ve developed several definitions, and got consensus on most of these in the first posting – but these three definitions have been challenging and we’ve proposed revisions to these three.

Cascading Outages V0: The uncontrolled successive failure of system elements triggered by an incident at any location within the Interconnection. Cascading results in widespread electric service interruption that cannot be restrained from sequentially spreading beyond an area predetermined by studies. New: The uncontrolled successive loss of BES Facilities triggered by an incident (or condition) at any location resulting in the interruption of electric service that cannot be restrained from spreading beyond a pre-determined area. There are several significant differences between these definitions: ‘Failure’ was replaced with ‘loss’ because not all contingencies are the result of equipment failure. ‘Incident’ was changed to ‘incident or condition’ to reflect that it isn’t always a single incident that leads to cascading – sometimes it is an emerging condition ‘System elements’ was changed to ‘BES Facilities’ to be more prescriptive. Because there is no consensus on a definition of the term, ‘widespread’, this was not used in the revised definition.

Contingency V0: The failure, with little or no warning, of one or more elements of the transmission system. This includes, but is not limited to, generator, transmission line, transformer, and circuit breaker failures or misoperations. New: The unexpected loss of one or more BES Facilities caused by a single initiating event. There are three significant differences between these definitions: ‘Failure’ was changed to ‘loss’ because not all contingencies are the result of equipment failure. ‘Elements of the transmission system’ was changed to ‘BES Facilities’ to be more inclusive – contingencies can be associated with generation facilities as well as transmission facilities. Because the term, ‘transmission’ was changed to ‘BES’, the explanatory sentence is no longer needed and it was dropped

Interconnection Reliability Operating Limit (IROL) V0: The value (such as MW, MVar, Amperes, Frequency or Volts) derived from, or a subset of the System Operating Limits, which if exceeded, could expose a widespread area of the Bulk Electric System to instability, uncontrolled separation(s) or cascading outages. New: A System Operating Limit that, if violated, could lead to instability, uncontrolled separation, or Cascading Outages that adversely impact the reliability of the Bulk Electric System. There are three significant differences between these definitions: ‘If exceeded’ was replaced with ‘if violated’ because not all limits are for the ‘upper’ bounds of operation – some limits are for the ‘lower’ bounds of reliable operation. There is no stakeholder consensus on a definition of ‘widespread area’. To avoid this, the term, ‘widespread area’ was replaced with ‘adverse impact’ Rather than insert a subset of the definition of SOL in the definition of IROL, we used the term, SOL.

Controversial Issues Flexible planning & operating horizons Peer review Schedules for delivery set by recipients Table 1 Category C Events and SOLs Partial retirement of V0 Standards During the development of this set of standards, we’ve encountered some controversial issues – and we’ve been able to resolve most of them so that the set of standards seems to have support from most, but not all commenters – Some of the controversy is based on misunderstanding, and we’re hoping to clear up some of that misunderstanding today.

Planning & Operating Horizons Standard requires no gaps in times covered Planning Horizon Operating Horizon This set of standards requires that ratings, limits and transfer capabilities be developed for the operating and planning horizon without gaps in coverage. Some stakeholders wanted all entities to adopt a default of real time up to one year for the operating horizon, and one year and beyond for the planning horizon. Many entities have operating and planning horizons that differ from the defaults – and there doesn’t seem to be a good reason to make these entities change their current practice Real Time 1 Year Ahead 2 Years Ahead 3 Years Ahead 4 Years Ahead

Planning & Operating Horizons Defaults: Operating Horizon = real-time up to 1 yr Planning Horizon = 1 yr and beyond Operating Horizon Planning The standards require the PA and RC to coordinate their activities so that all time periods are addressed, and requires that they both use the default horizons if they can’t come to mutual agreement. This seems to satisfy most stakeholders. Real Time 1 Year Ahead 2 Years Ahead 3 Years Ahead 4 Years Ahead

Peer Review Goal is to find a fair balance Owners rights versus impact on others ‘Allow’ but don’t ‘require’ peer review Challenges must be documented & acknowledged Threat of liability is motivator Idea from Blackout Recommendations The concept of ‘Peer Review’ was added to the standards following the Blackout Recommendations. The Drafting Team struggled to find a way of facilitating peer review without impacting on the owners rights – and we think we’ve found the right balance. The standards allow entities who receive the methodologies to provide technical comments on those methodologies. The recipient has to provide a written response in 45 days and identify whether or not the methodology will be changed, and if not – why not. Having this documentation should motivate entities to make changes to their methodology if those changes are warranted. Some commenters suggested that a NERC committee review the methodologies and give them an endorsement – this seems like an overwhelming task – to review the Facility Rating Methodology of every Facility Owner, every SOL Methodology of every RC and PA, and every TC Methodology of every RC and PA.

Schedules for Delivery . . . . . . to those entities that have a reliability-related need for such … and make a written request that includes a schedule for delivery of such … If you need to send limits to several different entities - deliver to all entities according to the most limiting schedule Providing ratings, limits and transfer capabilities to the end users is new. As an example, V0 doesn’t require distribution of facility ratings to end users – V0 standards have the ratings made available to Regions and NERC on request. End users should have some input into when they receive limits and transfer capabilities. (Ratings are distributed to end users without the need for a request.) The standards require the developers to distribute limits and transfer capabilities according to the schedules provided by the requestors. Some stakeholders thought this might be overwhelming – to provide limits to different end users on different schedules. If the developer adopts the most limiting schedule and distributes to all end users on that schedule, then everyone should be satisfied.

Table 1 - Category C Events Category C – (Loss of 2 or more Elements) applicable to planning studies with all facilities in service In most real-time operations, one or more facilities already out of service - operate to protect the system from a 2nd (or 3rd or 4th…) contingency SOLs established considering ‘Category C’ events would probably result in overly restrictive SOLs The drafting team received several comments indicating that consideration of all ‘Category C’ events should be required in establishing SOLs. Category C events are used in planning studies where all facilities are assumed to be in service. Category C events aren’t applicable to real time operations where you are probably already operating with one or more facilities out of service.

Partial Retirement of V0 Standards V1 Standards started before V0 Standards No 1-to-1 relationship between V0 and V1 Does partial retirement lead to confusion? The drafting team received some comments indicating that retiring part, but not all of a V0 standard would be problematic for stakeholders. There is no one-for-one relationship between V0 and V1 standards. These were started in different times, with different assumptions. Many of the V0 operations standards cover several different topics, and there aren’t any V1 standards under development to replace them. As we look at the drafting team’s recommendations for replacing part of one o the V0 Operating Standards, you decide if the standard will make sense if it is modified as suggested by the drafting team.

Retirement of V0 Requirements TOP-004 – Transmission Security Retire two requirements FAC-004 – Methodologies for Determining Electrical Facility Ratings Retire entire standard FAC-005 – Electrical Facility Ratings for System Modeling When the proposed standards are implemented, we are recommending that the one of the V0 Operating Standards (TOP-004) be revised – and recommending that two of the V0 Planning Standards be retired in their entirety. The reasoning for these recommendations and details are included in the Implementation Plan which is currently posted for comment.

R 6.3. Switching transmission elements. R6. TOPs, individually and jointly with other TOPs, shall develop, maintain, and implement formal policies and procedures to provide for transmission reliability. These policies and procedures shall address the execution and coordination of activities that impact inter- and intra-Regional reliability, including: R 6.1. Equipment ratings. R 6.2. Monitoring and controlling voltage levels and real and reactive power flows. R 6.3. Switching transmission elements. R 6.4. Planned outages of transmission elements. R 6.5. Development of IROLs and SOLs. R.6.6. Responding to IROL and SOL violations. We are recommending that Requirement 6.1 and 6.5 be retired. The TOP is not responsible for the execution and coordination of facility ratings It isn’t clear if 6.5 is requiring the TOP to have a procedure for the development of IROLs and SOLs or not – but the requirements for the methodology and for developing the limits are in the set of proposed standards. If you leave this standard intact, the TOP is subject to sanctions under two standards for the same infraction – and this isn’t appropriate.

Effective Dates – (Compliance) Assumes BOT Adopts November 1, 2005 Methodologies 6 months after BOT adoption - May 1, 2006 Ratings, Limits and Transfer Capabilities 2 months after methodologies – July 1, 2006 There is some confusion about ‘effective dates’. The ‘effective date’ is the date that you are responsible for compliance with the requirements in the standard. This set of standards has two different effective dates – Entities have 6 months beyond the BOT adoption date to formalize their methodologies. Entities develop these ratings, limits and capabilities now – but may need some time to make sure the methodologies in existence meet the criteria in the proposed standards. When we posted the implementation plan for this set of standards, stakeholders agreed that the 6 months is sufficient time to do this work. T Then, for the three standards that require developing ratings, limits and transfer capabilities according to the methodologies, there is an additional two months. Again, this is to give entities time to verify that their Facility Ratings, System Operating Limits and Transfer Capabilities are in conformance with the documented methodologies.

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