1. Brett Wangen, Director of Engineering James O’Brien, Senior Engineer Peak Reliability CIP-014-1 Guideline and Study Verification Service

2. 2 CIP-014-1 purpose: “To identify and protect Transmission stations and Transmission substations, and their associated primary control centers, that if rendered inoperable or damaged as a result of a physical attack could result in widespread instability, uncontrolled separation, or Cascading within an Interconnection.” CIP-014-1 Study Verification Service

3. 3 Requirement 2 says “Each Transmission Owner shall have an unaffiliated third party verify the risk assessment performed” The unaffiliated third party must be either: o A registered Planning Coordinator, Transmission Planner, or Reliability Coordinator; or o An entity that has transmission planning or analysis experience. In order for Peak to provide this service, a clear and concise guideline is needed. Why is Peak Involved?

4. 4 Peak’s Guideline was developed in conjunction with TSS representatives, and reviewed by the DOE Office of Electric Reliability and WECC CIP compliance. Received Approval from Peak Board Reviewed comments from industry and addressed as appropriate in the final Guideline Developing simple contract for service Steps Taken

5. 5 A guideline is not a standard o TOs are not required to follow the Guideline. However, if a TO would like Peak to perform R2 verification services, then Peak’s Guideline must be followed Why? Consistency and robustness in studies will provide a clearer direction for the TOs to perform the study and make it easier for Peak to perform the duties of a third party reviewer. Is Peak Requiring TOs to Follow the Guideline?

6. 6 Risk management o Similar to an insurance product, Peak’s evaluation will be based solely on materials provided by the TO. o Liability will be limited to the price of the evaluation. Contract o One study verification (not multiple year/studies) o Fixed price plus hourly rate o Both parties can exit for convenience, but TOs are required to meet financial obligations for expenses incurred by Peak. Service Structure and Cost

7. 7 Finalize contract to be used for this service Begin scheduling the work as soon as possible Need to assess demand for service o Peak will only provide the service as a third party reviewer if 10 or more TOs want Peak to provide the service. Next Steps for Peak

8. 8 TOs that want Peak to provide this service should: o Notify Peak of interest by sending an email to cip14@peakrc.com cip14@peakrc.com o Work with Peak to review Peak’s expectations as the third party reviewer o Sign contract for services o Schedule the work with Peak What is the Process?

9. Brett Wangen (bwangen@peakrc.com)bwangen@peakrc.com James O’Brien (jobrien@peakrc.com)jobrien@peakrc.com