October 03, 2016 Minutes
CITY OF DENTON CITY COUNCIL MINUTES
October 3, 2016
After determining that a quorum was present, the City Council convened in a Work Session on
Monday, November 7, 2016 at 12:00 a.m. in the Council Work Session Room at City Hall.
PRESENT: Mayor Pro Tem Roden, Council Member Wazny, Council Member Briggs, Council
Member Hawkins, Council Member Gregory, and Council Member Bagheri.
ABSENT: Mayor Watts.
1. Work Session Reports
A. ID 16-1262 Receive a report and hold a discussion regarding DME regulatory compliance
requirements and activities.
Smith Day, Compliance Manager for DME, stated that TRE (Texas Reliability Entity) audited
Denton Municipal Electric beginning May of 2016 through August 25, 2016. The TRE audit
concluded with no violations of NERC reliability standards.
Prior to the 2016 audit, TRE examined DME as part of its Reliability Assurance Initiative in April
of 2016. DME successfully demonstrated a reduced compliance risk to the TRE through its profile,
history, and controls. On this basis, TRE reduced the scope of its audit from 82 requirements to
14.
DME’s Transmission Operator certification was re-examined by TRE in March of 2016 with a
determination that re-certification was not required.
Day stated that major blackout events leading to today’s compliance environment included:
November 9, 1965 blackout in the northeastern U.S. and Ontario, Canada which affected 30
million people; July 13, 1977 blackout in New York City which affected 9,000,000 people; July
2, 1996 blackout in the western U.S. and parts of Canada and Mexico which affected 2,000,000
people; August 10, 1996 blackout in western U.S. and parts of Canada and Mexico which affected
7,500,000 customers; June 25, 1998 blackout in northern U.S. and parts of Canada which affected
152,000 customers; and March 18, 2000 blackout in New Mexico which affected 355,000
customers. On August 14, 2003, the power grid of the United States and Canada experienced the
largest blackout ever which affected 50 million people. The cost of the blackout has been
estimated to be between 7 and 14 billion dollars.
Congress responded by creating the National Energy Policy Act of 2005. The Federal Energy
Regulatory Commission (FERC) received power to impose mandatory reliability standards on the
bulk transmission system. NERC applied for and became the ERO under FERC’s authority.
Day reviewed the different regulators and their roles. He stated that the Federal Energy Regulatory
Commission (FERC) regulated interstate sales of electricity and natural gas; licensed and inspected
private, municipal, and state hydroelectric projects; monitored and investigated energy markets;
directed reliability enforcement through its Electric Reliability Organization (NERC). The North
American Electric Reliability Corporation (NERC) was established in 1968 as a non-profit
corporation created by the electric power industry. The NERC monitored the bulk power systems;
developed and enforced reliability standards; and audited electric utility operations for compliance
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October 3, 2016
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with reliability standards, rules, and procedures. The Texas Reliability Entity (TRE) audited
compliance with NERC reliability standards and ERCOT (Electric Reliability Council of Texas)
rules and developed regional-specific reliability standards.
He stated that the Public Utility Commission of Texas (PUCT) had oversight of market activity
through the Independent Market Monitor; enforced ERCOT Protocols; had oversight and approval
of Wholesale Transmission rates; regulated rates and terms of intra-state transmission and
distribution service in areas where customer choice had been introduced; and approved proposals
for the construction of new transmission facilities where customer choice had been introduced.
Day stated that the Electric Reliability Council of Texas (ERCOT) managed the flow of electric
power to 24 million Texas customers representing approximately 90% of the state’s electric load
and about 75% of the Texas land area. ERCOT coordinated the operation of more than 550
generation units; coordinated the operation of 46,500 circuit miles of high-voltage transmission;
and managed the financial settlement for the competitive wholesale bulk-power market.
He stated that DME participated in the following compliance activities: DME monitored,
participated, and responded to reliability concerns at national and regional levels. DME monitored
the development and change of standards by FERC and NERC. DME transmission operators
received regular specialized training and were required to obtain NERC certifications. DME
regulatory compliance and key staff participated with TRE in the development of compliance
procedures and compliance audits. DME staff had been elected municipal segment voting
participants in the ERCOT stakeholder process, including the ERCOT Board of Directors, ERCOT
Technical Advisory Committee (TAC), and Protocol Revision Subcommittee (PRS). DME staff
participated in different groups with ERCOT that shared information and were key to training.
Day stated that DME became subject to mandatory compliance regulations in mid-2007. In 2009,
DME retooled its compliance program that defined the processes, responsibilities for compliance
with the North American Electric Reliability Corporation (NERC) and the Texas Reliability Entity
(TRE). In 2009, DME established the position of Compliance Manager to administer DME’s
compliance program. DME was certified as a NERC Transmission Operator in December of 2010.
DME was audited in the 2013 with no findings of violations.
2. Concluding Items
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City
Council or the public with specific factual information or recitation of policy, or accept a
proposal to place the matter on the agenda for an upcoming meeting AND Under Section
551.0415 of the Texas Open Meetings Act, provide reports about items of community
interest regarding which no action will be taken, to include: expressions of thanks,
congratulations, or condolence; information regarding holiday schedules; an honorary or
salutary recognition of a public official, public employee, or other citizen; a reminder about
an upcoming event organized or sponsored by the governing body; information regarding a
social, ceremonial, or community event organized or sponsored by an entity other than the
governing body that was attended or is scheduled to be attended by a member of the
governing body or an official or employee of the municipality; or an announcement involving
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October 3, 2016
Page 3
an imminent threat to the public health and safety of people in the municipality that has arisen
after the posting of the agenda.
Council Member Bagheri stated that she had attended NLC University and had seen a seed library
in Madison, Wisconsin and had visited with our Director of Libraries about it.
With no further business, the meeting was adjourned at 12:33 p.m.
____________________________________
CHRIS WATTS
MAYOR
CITY OF DENTON, TEXAS
____________________________________
JANE RICHARDSON
ASSISTANT CITY SECRETARY
CITY OF DENTON, TEXAS