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McKinney St. Denton, Texas 76201 www.cityofdenton.com Legislation Text File #:ID 16-1262,Version:1 Agenda Information Sheet DEPARTMENT:DME CM/ ACM:Howard Martin Date:October 3, 2016 SUBJECT Receive a report and hold a discussion regarding DME regulatory compliance requirements and activities. BACKGROUND Asanelectricutility,DMEissubjecttoanumberofregulatoryrequirementsfromawidefieldofregulatory bodies,includingtheFederalEnergyRegulatoryCommission(FERC),theNorthAmericanElectricReliability Corporation(NERC),theTexasReliabilityEntity,thePublicUtilityCommissionofTexas(PUCT)andthe Electric Reliability Council of Texas (ERCOT). Thegoalofthispresentationistoprovideasummaryoverviewintotheareaswithinthepurviewofthese various agencies, how they relate to DME, and what is expected of DME from a compliance perspective. STRATEGIC PLAN RELATIONSHIP TheCityofDenton’sStrategicPlanisanaction-orientedroadmapthatwillhelptheCityachieveitsvision. Thefoundationfortheplanisthefivelong-termKeyFocusAreas(KFA):OrganizationalExcellence;Public Infrastructure;EconomicDevelopment;Safe,Livable,andFamily-FriendlyCommunity;andSustainabilityand EnvironmentalStewardship.WhileindividualitemsmaysupportmultipleKFAs,thisspecificCityCouncil agenda item contributes most directly to the following KFA and goal: Related Key Focus Area:Public Infrastructure Related Goal:2.3 Promote superior utility services and facilities EXHIBITS Exhibit 1 DME’s recent compliance activities Respectfully submitted: Phil Williams General Manager, DME Prepared by: Smith Day Compliance Manager City of DentonPage 1 of 1Printed on 9/30/2016 powered by Legistar© 29Sep16 5a9͸ƭrecentcomplianceactivities •TREauditedDMEbeginningMayof2016throughAugust26,2016.TheTRE auditconcludedwithnoviolationsofNERCreliabilitystandards. •Priortoits2016audit,TREexaminedDMEaspartofitsReliabilityAssurance Initiative(RAI)inAprilof2016.DMEsuccessfullydemonstratedareduced compliancerisktoTREthroughitsprofile,history,andcontrols.Onthisbasis, TREreducedthescopeofitsauditfrom82requirementsto14. •5a9͸ƭTransmissionOperatorcertificationwasreexaminedbyTREinMarch of2016withadeterminationthatrecertificationwasnotrequired. 1 MajorblackouteventsleadingtoƷƚķğǤ͸ƭcompliance environment: •November9,1965,blackoutinthenortheasternU.S.andOntario, Can.30millionpeople/~20,000MW/13hours. •July13,1977NewYorkCity9,000,000people;6,000MW interrupted •July2,1996AZ,CA,CO,ID,MN,NE,NV,NM,OR,SD,TX,UT,WA, WY;andpartsofCanadaandMexico2,000,000people/11,850 MW 2 1 29Sep16 •August10,1996Α!ͲCA,CO,ID,MN,NE,NV,NM,OR,SD,TX,UT, WA,WY;andpartsofCanadaandMexico7,500,000 customers/28,000MW •June25,1998ΑabͲMT,ND,SDandWI;andpartsofCanada 152,000customers;950MW •March18,2000ΑbĻǞMexicoΑЌЎЎͲЉЉЉcustomers,1052MW 3 ΑƷŷĻpowergridoftheUnitedStatesandCanadaexperiencedthelargestblackoutever.ΑЎЉmillion people/Morethan61,800megawatts(MW)ofelectricalloadlostinpartsofOhio,Michigan,NewYork,Pennsylvania,New Jersey,Connecticut,Massachusetts,VermontandtheprovinceofOntario.Thecostoftheblackouthasbeenestimatedtobe between7and14billiondollars. 4 2 29Sep16 Congressresponds 2005 Jurisdictional Expansion •The National Energy Policy Act of 2005 •FERC gets power to impose mandatory reliability standards on the bulk transmission system. •NERC applied for and became the ERO under the FERC’s authority. 5 TheRegulators •FederalEnergyRegulatoryCommission(FERC)Α •Regulatinginterstatesalesofelectricityandnaturalgas. •Licensesandinspectsprivate,municipal,andstatehydroelectricprojects. •Monitorsandinvestigatesenergymarkets. •DirectsReliabilityEnforcementthroughitsElectricReliabilityOrganization (NERC) •Sanctions:MaximumPenaltyAmountis$1,000,000perday,perviolation. 6 3 29Sep16 •NorthAmericanElectricReliabilityCorporation(NERC)Α9ƭƷ͵1968 aftertheNortheastblackoutof1965.Anonprofitcorporation createdbytheelectricpowerindustry.In2007FERCdelegated responsibilitytoregulatebulkpowersystemowners/operators •Monitorsthebulkpowersystems. •Developsandenforcesreliabilitystandards. •Auditselectricutilityoperationsforcompliancewithreliabilitystandards, rules,andprocedures. •Hasauthorityandmayimposeseverefinancialpenaltyfornoncompliance. •Educatestrainsandcertifiesindustrypersonnel. 7 •TexasReliabilityEntity(TRE)Αb9w/delegatedcompliancemonitoringauthority responsiblefortheElectricReliabilityCouncilofTexas(ERCOT). •AuditscompliancewithNERCreliabilitystandardsandERCOTrules. •Developsregionalspecificreliabilitystandards. 8 4 29Sep16 •PublicUtilityCommissionofTexas(PUCT)ΑƩĻŭǒƌğƷƚƩǤactivities applicabletoDME: •Oversightofmarketactivitythroughthe IndependentMarketMonitor. •EnforcementofERCOTProtocols •OversightandapprovalofWholesaleTransmissionrates •Regulatingratesandtermsofintrastatetransmissionanddistributionservice inareaswherecustomerchoicehasbeenintroduced. •Approvingandsitingofproposalsfortheconstructionofnewtransmission facilitieswherecustomerchoicehasbeenintroduced. 9 •ElectricReliabilityCouncilofTexas(ERCOT)ΑƒğƓğŭĻƭtheflowof electricpowerto24millionTexascustomersrepresenting approximately90%oftheƭƷğƷĻ͸ƭelectricloadandabout75%ofthe Texaslandarea. •Coordinatestheoperationofmorethan550generationunits. •Coordinatestheoperationof46,500circuitmilesofhighvoltage transmission. •Managesthefinancialsettlementforthecompetitivewholesalebulkpower market. 10 5 29Sep16 DMEComplianceActivities •5a9ΓƒƚƓźƷƚƩƭͲparticipates,respondstoreliabilityconcernsatnationaland regionallevels. •DMECompliancemonitorsthedevelopmentandchangeofstandardsbyFERC andNERC. •DMETransmissionoperatorsreceiveregularspecializedtrainingandare requiredtoobtainNERCcertifications. •DMERegulatoryComplianceandkeystaffparticipatewithTREinthe developmentofcomplianceproceduresandcomplianceaudits. •DMEstaffareelectedmunicipalsegmentvotingparticipantsintheERCOT stakeholderprocess,includingtheERCOTBoardofDirectors,ERCOTTechnical AdvisoryCommittee(TAC),andProtocolRevisionSubcommittee(PRS). 11 •DMEstaffregularlyparticipateinERCOTgroups: •ReliabilityandOperationsSubcommittee •BlackStartWorkingGroup •VoltageProfileWorkingGroup •OperationsTrainingWorkingGroup •QSEManagersWorkingGroup •DynamicsWorkingGroup •NetworkDataSupportWorkingGroup •PlanningGeomagneticDisturbanceTaskForce •TransmissionPlanningWorkingGroup •SystemProtectionWorkingGroup •SteadyStateWorkingGroup 12 6 29Sep16 Past: •DMEbecamesubjecttomandatorycomplianceregulationsinmid2007. •In2009DMEretooleditscomplianceprogramthatdefinestheprocesses,responsibilitiesfor compliancewiththeNorthAmericanElectricReliabilityCorporation(NERC)andtheTexas ReliabilityEntity(TRE). •In2009DMEestablishedthepositionofͻ/ƚƒƦƌźğƓĭĻağƓğŭĻƩͼtoadminister5a9͸ƭ complianceprogram. •DMEwascertifiedasaNERCTransmissionOperatorinDecemberof2010. •DMEwasauditedinthe2013withnofindingsofviolations. 13 7