Procedures and Forms 2008 FRCC Compliance Workshop April 8-9, 2008

2 The Eight (8) Compliance Monitoring Processes Process to collect information in order to make assessments of compliance: 1. Compliance Audits 2. Self-Certification 3. Spot Checking 4. Self-Reporting 5. Exception Reporting 6. Complaint 7. Compliance Violation Investigations 8. Periodic Data Submittals

3 Compliance Audits A systematic, objective review and examination of records and activities to determine whether a Registered Entity meets the requirements of applicable Reliability Standards. On-site Off-site

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5 Compliance Audits The compliance audit scope will include all Reliability Standards applicable to the Registered Entity monitored in the NERC/FRCC Implementation Plans. The scope may also include other Reliability Standards and FRCC Regional Reliability Standards that have been approved by FERC.

6 Compliance Audits If the data retention requirements of a Reliability Standard does not cover the full period of the compliance audit, the audit will only be applicable to the data retention period specified in the Reliability Standard. Audit team members are required to sign and return FRCC Non-Disclosure Agreements.

7 Compliance Audits FRCC compliance staff notifies the registered entity of the audit, identifies the audit team members, and sends Pre-Audit Questionnaire and request for data. The registered entity completes and returns Pre-audit Questionnaire and requested documentation to the FRCC by the required data.

8 Compliance Audits FRCC compliance staff distributes completed Pre-Audit Questionnaire and documentation to the audit team for review. Compliance audit is conducted. Audit team drafts report, sends to registered entity for review, submits final audit report to FRCC compliance staff.

9 Compliance Audits FRCC compliance staff determines alleged violations. FRCC compliance committee reviews FRCC compliance staff determination. FRCC compliance staff determines applicable penalties and sanctions and sends notice of violation and penalty and/or sanctions to registered entity.

10 Self-Certification Attestation by a Registered Entity of compliance or non-compliance with Reliability Standards for which Self- Certification is required by the FRCC and that are included for monitoring in the FRCC Implementation Plan.

11 Self-Certification FRCC requires all registered entities to self- certify annually. FRCC sends the self-certification forms to the registered entities generally in the first week in November. FRCC compliance staff reviews the information provided by the registered entity to determine compliance with the reliability standards and may request additional data and /or information, if necessary.

12 Self-Certification FRCC compliance staff will provide a summary report of the self-certification results to the FRCC compliance committee for review.

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14 Spot Checking A process in which the FRCC requests a Registered Entity to provide information to support the Registered Entity’s Self-Certification, Self-Reporting, or Periodic Data Submittal and to assess whether the Registered Entity complies with Reliability Standards. Spot Checking may also be random or initiated in response to events, as described in the Reliability Standards, or by operating problems or system events. Spot Checking may require an on-site review to complete.

15 Spot Checking Spot checks may be initiated at any time to verify or confirm compliance status. FRCC compliance staff sends notice of Spot Check and data request to the registered entity. Registered entity returns requested documentation to the FRCC compliance staff.

16 Spot Checking FRCC compliance staff selects the Spot Check review team members and schedules the review. Spot Check reviews are normally conducted at the FRCC office. The Spot Check review team will provide a report of findings to the FRCC compliance staff. Registered entities will have opportunity to review draft report to correct any errors.

17 Spot Checking FRCC compliance committee reviews FRCC compliance staff determination. Same process for final determination of alleged violation and applicable penalty and/or sanction.

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19 Compliance Violation Investigations A comprehensive investigation, which may include an on-site visit with interviews of the appropriate personnel, to determine if a violation of a Reliability Standard has occurred.

20 Compliance Violation Investigations Can be initiated at any time in response to a disturbance, complaint, or notification of possible violation. FRCC compliance staff selects the investigation review team members. FRCC compliance staff will notify the registered entity and NERC within 2 business days of the decision to conduct a Compliance Violation Investigation.

21 Compliance Violation Investigations FRCC will provide at least 20 calendar days notice for data request. The investigation review team members will review preliminary information or data and determine if additional data or on-site inspections are needed. On-site inspection is scheduled, if needed.

22 Compliance Violation Investigations Registered entity returns requested data in the required format to the FRCC compliance staff. Investigation review team identifies a finding of compliance or non-compliance. Investigation review team provides a report of the findings to the FRCC compliance staff.

23 Compliance Violation Investigations FRCC compliance staff will provide the determination of alleged violation to the FRCC compliance committee. Same process for final determination of alleged violation and applicable penalty and/or sanction.

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25 Self-Reporting A report by a Registered Entity of a violation of a Reliability Standard, based on its own assessment, in order to provide prompt reports of any Reliability Standard violation and the actions that were taken or will be taken to resolve the violation.

26 Self-Reporting Self-reporting is encouraged any time a registered entity becomes aware: –Of their violation of a reliability standard, or –A change in the violation severity level of a previously reported violation. Self reporting may be considered as a mitigating factor during the determination of a penalty and/or sanction.

27 Self-Reporting The process steps of self-reporting are as follows: Download the Self-reporting submittal form from the FRCC website at: Fill out the Self-reporting information and forward the applicable mitigation plan to the FRCC Compliance Manager at: The FRCC compliance staff will review the information to determine compliance and may request the registered entity to provide clarification or additional data and/or information.

28 Self-Reporting The FRCC compliance staff completes the assessment of the registered entity. Same process for final determination of alleged violation and applicable penalty and/or sanction.

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30 Periodic Data Submittals Modeling, studies, analyses, documents, procedures, methodologies, operating data, process information or other information to demonstrate compliance with Reliability Standards and provided by Registered Entities to the FRCC on a time frame required by a Reliability Standard or an ad hoc basis.

31 Periodic Data Submittals In 2008, the FRCC requires monthly reporting for the following standards; BAL-001-0BAL BAL EOP-002-2FAC INT IRO-004-1IRO PER PER-004-1PRC PRC TOP-005-1TOP Reporting forms are located on the FRCC compliance website at:

32 Periodic Data Submittals Reports are due to the FRCC by the 10 th of each month. Submit to Each report will be for the calendar month preceding the 10 th of the month that it is submitted. Not applicable, fully compliant, or a violation severity level (level of non- compliance) must be indicated for each standard and requirement.

33 Periodic Data Submittals For reliability standard FAC-003-1, requirement 3 requires reporting of vegetation caused outages. –If during the reporting period you had an actual reportable vegetation caused outage, compete the Vegetation Management Report and outage details. For ALL reports of non-compliance, a mitigation plan is required. Please submit the mitigation plan to FRCC along with the monthly report.

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35 Exception Reporting Information provided to the FRCC by a Registered Entity indicating that a violation of a Reliability Standard has occurred (e.g., a system operating limit has been exceeded). Some Reliability Standards require Exception Reporting.

36 Exception Reporting Some reliability standards require reporting of exceptions to compliance with the reliability standard as a form of compliance monitoring. FRCC requires registered entities to provide reports identifying any exceptions to the extent required by any reliability standard. FRCC requires registered entities to confirm the number of exceptions that have occurred in a given time period identified by NERC, even if the number of exceptions is zero.

37 Complaints An allegation that a Registered Entity violated a Reliability Standard.

38 Complaints Either NERC or FRCC may receive complaints alleging violations of a reliability standard. –FRCC will conduct a review of each complaint it receives to determine if the complaint provides sufficient basis for a compliance violation investigation. –NERC will conduct a review of each complaint That is related to FRCC. Where the FRCC determines it cannot conduct the review. If the complainant wished to remain anonymous. If the complainant specifically requests NERC to conduct a review of a complaint.

39 Complaints The complainant notifies NERC or the FRCC by using the NERC hotline, submitting a NERC complaint reporting form, or by other means. –A link to the complaint form is posted on the NERC and FRCC websites. The complainant should include sufficient information to enable NERC or the FRCC to make an assessment of whether the initiation of a compliance violation investigation is warranted. –NERC or FRCC may not act on a complaint if the complaint is incomplete and does not include sufficient information.

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