1. COMPLIANCE ROLLOUT Vann Weldon Compliance Training Administrator March 23, 2005 NERC FUNCTIONAL MODEL REVIEW

2. Objectives: Attendees attending this segment of the rollout will be able to: 1.Describe what the NERC Functional Model is. 2.Recognize what is meant by Function, Task, and Responsible Entity. 3.Conceptually apply the relationship between a Designated Responsible Entity those performing delegated tasks. 4.Recognize that the Protocols and Operating Guides have pre-defined the delegation of tasks.

3. Objectives: Attendees attending this segment of the rollout will be able to: 5.Prepare to demonstrate, through documentation, the capability and qualifications of their organizations, systems, and personnel to perform delegated or assigned tasks.

4. Control Area Utilities Customers Customer Service Control Area Regulated Function Old World – Before Deregulation NERC Regional ISO

5. New World – New Protocols Transmission Customers & maybe Resources Generators Load Serving Entity QSE Distribution Transmission Operator Regulated Function TDSP

6. NERC had to adjust their policies to address: Existing Control Areas and the new configurations, (ERCOT, PJM, CALISO, NYISO)

8. Generator Operations (Generator Operator) Generator Ownership (Generator Owner) Transmission Ownership (Transmission Owner) Load-Serving (Load-Serving Entity) Purchasing- Selling (Purchasing-Selling Entity) Transmission Operations (Transmission Operator) Distribution (Distribution Provider) Planning and Operating Functions Resource Planning (Resource Planner) Transmission Planning (Transmission Planner) Balancing (Balancing Authority) Interchange (Interchange Authority) Transmission Service (Transmission Service Provider) Operating Reliability (Reliability Authority) Reliability Service Functions Planning Reliability (Planning Authority) Market Operations (Market Operator or Resource Dispatcher) Function. A group of tasks that cannot be logically subdivided into other groups.

9. Task. One of the elements that make up a Function in the Functional Model. Responsible Entity. The label that NERC applies to an organization that is responsible for carrying out ALL of the tasks within a Function. Those tasks performed by another organization(s) are to have contracted responsibilities (e.g. Protocols). For any given function there will be one Responsible Entity. Organizations (e.g., ERCOT Inc., QSEs, TOs, …) may share tasks BUT, responsibility for that function is to belong to only one (1) organization.

10. One of these organizations (in this case, Organization 2) registers with NERC that it is the Designated Responsible Party, and is responsible for compliance requirements and penalties. It would have an agreement with Organization 1 on how penalties would be assigned between these two organizations. The certification audit team may have to visit both organizations. ORG1ORG2 Designated Responsible Entity Balancing Authority

11. Balancing (Balancing Authority) Interchange (Interchange Authority) Transmission Service (Transmission Service Provider) Operating Reliability (Reliability Authority) Reliability Service Functions Planning Reliability (Planning Authority) Market Operations (Market Operator or Resource Dispatcher) Generator Operations (Generator Operator) Generator Ownership (Generator Owner) Transmission Ownership (Transmission Owner) Load-Serving (Load-Serving Entity) Purchasing- Selling (Purchasing-Selling Entity) Transmission Operations (Transmission Operator) Distribution (Distribution Provider) Planning and Operating Functions Resource Planning (Resource Planner) Transmission Planning (Transmission Planner) ERCOT Has Registered and will Certify as the Responsible Entity for all Reliability Service Functions and for Transmission Ops and Resource Planning.

12. PROTOCOLS NERCFERC

13. 1. Maintain reliability of the transmission area in accordance with Reliability Standards. 2. Provide detailed maintenance schedules 3. Adjust DC ties within the transmission area for those Interchange Transactions that include the DC tie in the transmission path 6. Provide telemetry of transmission system information TRANSMISSION OPERATOR TASKS ERCOTERCOT TOTO QSEQSE An example of: Who is going to be assessed to demonstrate compliance with NERC Criteria? What do the PROTOCOLS & OP GUIDES say?

14. 4. Formulate an operational plan (generation commitment, outages, etc) for reliability assessment 7. Provide frequency response 8. Monitor and report control performance and disturbance recovery ERCOTERCOT TOTO QSEQSE BALANCING AUTHORITY TASKS An example of: Who is going to be assessed to demonstrate compliance with NERC Criteria? What do the PROTOCOLS & OP GUIDES say?

15. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: PLANNING RELIABILITY RESPONSIBLE ENTITY: PLANNING AUTHORITY Ensures a long-term (generally one year and beyond) plan is available for adequate resources and transmission within a Planning Authority Area. It integrates and assesses the plans from the Transmission Planners and Resource Planners within the Planning Authority Area to ensure those plans meet the reliability standards, and develops and recommends solutions to plans that do not meet those standards. ERCOT

16. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: TRANSMISSION PLANNING RESPONSIBLE ENTITY: TRANSMISSION PLANNER Develops a long-term (generally one year and beyond) plan for the reliability (adequacy) of the interconnected bulk electric transmission systems within its portion of the Planning Authority Area. TRANS OPERATOR Organization in ERCOT’s region to register

17. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: TRANSMISSION OWNERSHIP RESPONSIBLE ENTITY: TRANSMISSION OWNER Owns and maintains transmission facilities. TDSP FUNCTION: DISTRIBUTION RESPONSIBLE ENTITY: DISTRIBUTION PROVIDER Provides and operates the “wires” between the transmission system and the end-use customer. TDSP Organization in ERCOT’s region to register

18. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: GENERATION OPERATION RESPONSIBLE ENTITY: GENERATION OPERATOR Operates generating unit(s) and performs the functions of supplying energy and Interconnected Operations Services. QSE FUNCTION: GENERATION OWNERSHIP RESPONSIBLE ENTITY: GENERATION OWNER Owns and maintains generating units. PGC Organization in ERCOT’s region to register

19. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: PURCHASING SELLING RESPONSIBLE ENTITY: PURCHASING SELLING ENTITY Purchases or sells energy, capacity and all necessary Interconnected Operations Services as required. Purchasing-Selling Entities may be Marketers or Merchant Affiliates. QSE Organization in ERCOT’s region to register

20. OTHER FUNCTIONAL ENTITIES AND THEIR EXPECTED REGISTRANTS FUNCTION: LOAD SERVING RESPONSIBLE ENTITY: LOAD SERVING ENTITY Secures energy and transmission service (and related Interconnected Operations Services) to serve the end-use customer. QSE Organization in ERCOT’s region to register

21. Operator Certification/Qualification NERC Standard PER-003-0 B. Requirements R1. Each Transmission Operator, Balancing Authority, and Reliability Coordinator shall staff all operating positions …with personnel that are NERC-certified for the applicable functions: R1.1. Positions that have the primary responsibility, either directly or through communications with others, for the real-time operation of the interconnected Bulk Electric System.

22. PROTOCOLS 4.3.4 Operations of the Qualified Scheduling Entity Scheduling Center Requirement. A QSE shall maintain a 24-hour, seven-day- per-week scheduling center with qualified personnel … The NERC Functional Model now defines tasks Operators must be qualified to perform

23. Certification Acme Balancing Authority NERC Functional Model Standard The BA shall Ensure that Load and Generation… Standards Organization Registration by Function Compliance

24. NERC Standards will be applied. Today we have a voice in the content of what will be applied. Tomorrow we will be required to document our performance.

25. REFERENCES: http://www.nerc.com click on Reliability Standards From the paragraph on this page there are hotlinks to the Functional Model and many other issues that will be discussed here today.

26. Questions ? ? ? ?