Overview of WECC and Regulatory Structure Matthew Moore Manager of Enforcement Good afternoon, and welcome to the series of Compliance 101 videos. Our goal in producing these segments is, of course, for you to learn the basics of what we do at WECC, why we do it, and indeed what your role is and what you can expect from us. I will give you the high level overview of how we got to where we are, where our authority comes from, why we are doing this, and how WECC come to be.

WECC Profile The Western Electricity Coordinating Council (WECC) is a 501(c)(4) social welfare organization corporation that exists to assure a reliable bulk electric system in the geographic area of the Western Interconnection. This area includes all or parts of the 14 western United States, two Canadian provinces, and the northern portion of Baja California, Mexico. WECC is anon-profit organization, specifically with the IRS status as a social welfare organization. WECC is the largest of the eight regional entities with delegated authority to monitor and enforce mandatory reliability standards, we cover 14 western states, two canadian provinces and a part of Baja California in Mexico. We exist in part to assure the reliability of the bulk electric system throughout this western interconnection.

WECC History Incorporated in 2002 Predecessor, WSCC formed in 1967 Largest geographic area of the eight Regional Entities Entire Western Interconnection (1.8 million square miles) - includes all or part of 14 U.S. states, 2 Canadian provinces and a portion of Baja California Norte, Mexico Non-Governmental Industry participants join together to promote system reliability Bifurcation in February 2014 changed functions To best understand where we are today, it is important to know our history. While WECC was incorporated in 2002, the predecessor organization, the Western States Coordinating Council formed in 1967; this organization did some similar functions that we still do today. While we are a non-governmental organization, we do have powers that have been delegated to us by government. I mentioned we are a social welfare organizations, acting in the public interest, however, we have many partners in achieving our mission including industry and other stakeholder participation and partnerships. For those who may be somewhat familiar to WECC but may not be keeping specifically up to the date, historically WECC was Reliability Coordinator, operating in Loveland Colorado and Vancouver Washington, as well as an Interchange Authority. In 2014, WECC spun off or bifurcated such that we no longer perform those functions.

WECC Coverage Service Area 1.8 million square miles 126,285 miles of transmission Population of 78 million WECC is the largest and most diverse of the eight regional entities, coving almost two million square miles and significant population with most densely populated areas and rural areas throughout the western US, Canada, and Mexico.

I have said a few times now that WCC is one of eight regional entities with authority delegated to them by NERC. This map shows all eight regional entities. WECC and Texas are the only regional entities that cover an entire interconnection with six organizations covering the eastern interconnection.

WECC Organization Independent Board of Directors 9 members Committees Members Advisory Committee Members Grid owners, operators, users Stakeholders State and Provincial With a recent reorganization, WECC’s 9-member board is made if of independent board members and is advised by a number of committees including a committee that represents membership’s interests.

WECC Services Transmission expansion planning Studies Management of a comprehensive planning database Provide coordination of sub-regional planning processes Analyses and modeling Studies Model the system and perform studies under a variety of scenarios to set operating policies and limits So, with that history and governance overview as context What does WECC do? What does it mean to perform as a social welfare organization? We provide services, including transmission expansion planning that benefits the industry as well as polocy makers

WECC Services Loads and Resources Assessments Operator Training WREGIS Perform annual assessment of 10-year loads and resources Maintain 10-year coordinated plan of system growth Provide information to NERC for summer and winter assessments of the reliability and adequacy of the bulk-power system Operator Training Provide training sessions for operators, schedulers and dispatchers WREGIS Hosts the Western Renewable Energy Generation Information System, which creates and tracks renewable energy certificates

WECC Services Delegation Agreement Perform functions delegated to WECC as a Regional Entity under Delegation Agreement with NERC, including; facilitating development of western interconnection reliability standards conducting reliability assessments and event analysis regulating entities subject to mandatory Reliability Standards

Mandatory Reliability Regulation Northeast Blackout of 2003 10 Million people in Ontario, Canada 45 million people in eight U.S. states

Task Force Report Final report of the U.S.- Canada Power System Outage Task Force on the 2003 blackout concluded: the single most important recommendation for preventing future blackouts, and reducing the scope of those that occur, is for the U.S. government to make reliability standards mandatory and enforceable.

Task Force Findings Inadequate System Understanding Inadequate Situational Awareness Inadequate Tree Trimming Inadequate Reliability Center Diagnostic Support

Congressional Action Energy Policy Act of 2005 “Section 215” On August 8, 2005, the Energy Policy Act of 2005 (EPAct 2005) was signed into law. “Section 215” Section 215 of the EPAct 2005 directed FERC to certify an Electric Reliability Organization (ERO) and develop procedures for establishing, approving and enforcing electric reliability standards.

Authority for Compliance Monitoring FERC Order 672 (Implementing Rule 18 CFR 39) Responsibility and oversight assigned to FERC FERC designated NERC as Electric Reliability Organization NERC has delegation agreement with WECC and seven other regions

Implementing Section 215 SECTION 215 Creates Electrical Reliability Organization (ERO) FERC names NERC as ERO Regional Entities NERC selects 8 regional entities WECC is selected for Western Interconnection Delegation Agreement NERC and WECC sign agreements WECC oversight begins in Western Interconnection

Order 693 & Order 706 Standards Order 693 (Operations and Planning) includes: Resource and Demand Balancing (BAL) Emergency Preparedness & Operations (EOP) Facilities Design, Connection & Mtnce. (FAC) Protection and Control (PRC) Order 706 (CIP) includes: Critical Cyber Asset Identification Personnel & Training Electronic Security Perimeters

WECC Compliance Recommends Registrations for Entities Register users, owners, operators according to function Monitors Compliance with Standards Monitor compliance by users, owners and operators of the bulk power system in the United States Enforces Compliance Violation mitigation and settlement negotiation Representation of WECC in any hearing or appeal process Administration Audit coordination Reporting systems webCDMS and EFT

Reliability Standards Authority CMEP Reliability Standards Delegation Agreement Federal Power Act 2005

Registration Registration Authority WECC recommends registration to NERC based on functions New tool Discussed by Brittany Power later Authority

Monitoring Other Self Certifications Registration Self Reports Audits Onsite Audit Offsite Audit Self Reports Self Certifications Spot Checks Compliance Violation Investigations Complaints Authority

Enforcement Mitigation Actions Settlement Registration Monitoring Risk Assessments Mitigation Actions Settlement Due Process If a violation is identified, due process includes Notice of Alleged Violation and Penalty or Sanction Registered Entity Response Request for Settlement or Hearing NERC Approval FERC Approval Mitigation of Violations Prompt mitigation of violations and of risk to BES is important Mitigation is not an “admission of guilt” WECC reviews mitigation plans and accepts, rejects or requests revisions WECC reviews completion of mitigation activities Authority

Reference Documents Compliance Monitoring and Enforcement Program (CMEP) & WECC’s annual implementation plan Delegation Agreement Rules of Procedure NERC Reliability Standards NERC Guidance, Bulletins, Directives and Compliance Application Notices (CANs) FERC Orders