North American Electric Reliability Council, 041907 FERC, RR06-1-004

Docket Nº:RR06-1-004, RR07-1-000, RR07-2-000, RR07-3-000, RR07-4-000, RR07-5-000, RR07-6-000, RR07-7-000, RR07-8-000, RR06-3-000
Party Name:North American Electric Reliability Council, North American Electric Reliability Corporation Delegation Agreement Between the North American Electric Reliability Corporation and Texas Regional Entity, a division of ERCOT Delegation Agreement Between the North American Electric Reliability Corporation and Midwest Reliability Organization Delegation
Judge Panel:Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, and Jon Wellinghoff. Commissioner Moeller not participating. Philis J. Posey, Deputy Secretary.
Case Date:April 19, 2007
Court:Federal Energy Regulatory Commission
 
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119 FERC 61, 060

North American Electric Reliability Council, North American Electric Reliability Corporation

Delegation Agreement Between the North American Electric Reliability Corporation and Texas Regional Entity, a division of ERCOT

Delegation Agreement Between the North American Electric Reliability Corporation and Midwest Reliability Organization

Delegation Agreement Between the North American Electric Reliability Corporation and Northeast Power Coordinating Council: Cross Border Regional Entity, Inc.

Delegation Agreement Between the North American Electric Reliability Corporation and ReliabilityFirst Corporation

Delegation Agreement Between the North American Electric Reliability Corporation and SERC Reliability Corporation

Delegation Agreement Between the North American Electric Reliability Corporation and Southwest Power Pool, Inc.

Delegation Agreement Between the North American Electric Reliability Corporation and Western Electricity Coordinating Council

Delegation Agreement Between the North American Electric Reliability Corporation and Florida Reliability Coordinating Council.

North American Electric Reliability Corporation

Nos. RR06-1-004, RR07-1-000, RR07-2-000, RR07-3-000, RR07-4-000, RR07-5-000, RR07-6-000, RR07-7-000, RR07-8-000, RR06-3-000

United States of America, Federal Energy Regulatory Commission

April 19, 2007

Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, and Jon Wellinghoff.

ORDER ACCEPTING ERO COMPLIANCE FILING, ACCEPTING ERO/REGIONAL ENTITY DELEGATION AGREEMENTS, AND ACCEPTING REGIONAL ENTITY 2007 BUSINESS PLANS

CONTENTS

Paragraph

I. Background ………………………………………………………………….. 6

II. Notices and Responsive Pleadings …………………………………………..11

III. Procedural Matters …………………………………………………………..15

IV. NERC’s Compliance Filing …………………………………………………16

A. Reliability Standards Development Procedures……………………... 17

B. Compliance Monitoring and Enforcement Procedures ……….……... 25

1. Compliance Audits ………………………………………..….. 27

2. Investigations…………………………… ..... ………………… 54

3. Mitigation Plans and Remedial Actions …...……………….… 77

4. Settlement Process ………..………………………………….... 96

5. Complaints …………………………………………………….. 108

6. Confidentiality ………………………………………………… 121

7. Penalties …………………………………………………… ...... 128

8. Hearing Procedures …………………………………………… 134

9. Appeals and ERO Review of Penalties ……………………….. 166

10. Miscellaneous Comments and Protests Regarding the NERC’s Pro Forma Uniform Compliance Program …………. 175

a. Fact and Circumstances Review ……..………………... 175

b. Appeal of Decisions on Data Requests ……..……….... 177

c. Applicable Governmental Authority …………………. 179

d. Confirmed Violations ………………………………… 181

e. Exception Reporting ………………………………….. 183

f. Obligations to Mitigate ……………………………….. 185

g. Periodic Data Submittals ……………………………… 188

h. Regional Compliance Registries ……………………… 191

i. Spot Checking ………………………………………… 193

j. Self-Certification and Self-Reports …………....……… 195

k. Entity Representatives ……………………………….... 197

l. Reporting to NERC …………………………………… 199

m. Record Retention Requirements ………………….…… 203

n. Chronic Violators ……………………………………... 206

o. Revisions ……………………………………………… 208

C. NERC’s Remaining Compliance Revisions to the Pro Forma Delegation Agreement ………………………… .............. 212

1. Definitions ……………………………………….…………... 212

2. Billing and Collection ………….………………………….… 213

3. Confidentiality ........................................................................... 214

D. Miscellaneous Comments and Protests Regarding the Pro Forma Delegation Agreement ……………………………….….. 222

V. The NERC/Regional Entity Delegation Agreements ………………….…….. 224

A. Texas Regional Entity, a Division of Electric Reliability Council of Texas, Inc. (TRE) Delegation Agreement …………………………. 230

1. TRE Base Delegation Agreement ……………………….…….. 232

2. Exhibit A: TRE Regional Boundary ………………………….. 235

3. Exhibit B: TRE Governance Structure ……………………….. 236

4. Exhibit C: TRE Reliability Standards Development ……… ..... 246

5. Exhibit D: TRE Compliance Monitoring and Enforcement….. 250

6. Exhibit E: TRE Funding ……………………………………... 254

B. Midwest Reliability Organization (MRO) Delegation Agreement …... 258

1. MRO Base Delegation Agreement ………………………….... 261

2. Exhibit A: MRO Regional Boundary ………………………... 262

3. Exhibit B: MRO Governance Structure ……………………... 264

4. Exhibit C: MRO Reliability Standards Development ……….. 277

5. Exhibit D: MRO Compliance Monitoring and Enforcement.... 281

6. Exhibit E: MRO Funding ……………………………………. 282

C. Northeast Power Coordinating Council: Cross-Border Regional Entity, Inc. (NPCC) Delegation Agreement …………………………. 285

1. NPCC Base Delegation Agreement ………………………….. 287

2. Exhibit A: NPCC Regional Boundary ………………………. 288

3. Exhibit B: NPCC Governance Structure ……………………. 290

4. Exhibit C: NPCC Reliability Standards Development ……… 299

5. Exhibit D: NPCC Compliance Monitoring and Enforcement .. 303

6. Exhibit E: NPCC Funding …………………………………… 314

D. ReliabilityFirst Corporation (RFC) Delegation Agreement …………. 316

1. RFC Base Delegation Agreement …………………………….. 318

2. Exhibit A: RFC Regional Boundary …………………………. 320

3. Exhibit B: RFC Governance Structure ……………………….. 322

4. Exhibit C: RFC Reliability Standards Development ………… 335

5. Exhibit D: RFC Compliance Monitoring and Enforcement…... 342

6. Exhibit E: RFC Funding ……………………………………… 350

E. SERC Reliability Corporation (SERC) Delegation Agreement ……… 351

1. SERC Base Delegation Agreement …………………………… 353

2. Exhibit A: SERC Regional Boundary ………………………… 354

3. Exhibit B: SERC Governance Structure …………………….... 356

4. Exhibit C: SERC Reliability Standards Development ….……. 368

5. Exhibit D: SERC Compliance Monitoring and Enforcement ... 373

6. Exhibit E: SERC Funding ……………………………………. 374

F. Southwest Power Pool, Inc. (SPP) Delegation Agreement …………… 375

1. SPP Base Delegation Agreement ……………………………… 377

2. Exhibit A: SPP Regional Boundary …………………………… 378

3. Exhibit B: SPP Governance Structure ………………………… 380

4. Exhibit C: SPP Reliability Standards Development ……… ...... 406

5. Exhibit D: SPP Compliance Monitoring and Enforcement …... 424

6. Exhibit E: SPP Funding ………………………………………. 425

G. Western Electricity Coordinating Council (WECC) Delegation Agreement ………………………………………………... 432

1. WECC Base Delegation Agreement …………………………... 434

2. Exhibit A: WECC Regional Boundary ……………………….. 443

3. Exhibit B: WECC Governance Structure ……………………... 444

4. Exhibit C: WECC Reliability Standards Development ………... 461

5. Exhibit D: WECC Compliance Monitoring and Enforcement ... 480

6. Exhibit E: WECC Funding ……………………………………. 516

H. Florida Reliability Coordinating Council, Inc. (FRCC) Delegation Agreement …………………………………………………. 538

1. FRCC Base Delegation Agreement …………………………….. 540

2. Exhibit A: FRCC Regional Boundary …………………………. 541

3. Exhibit B: FRCC Governance Structure ………………………. 543

4. Exhibit C: FRCC Reliability Standards Development ………... 554

5. Exhibit D: FRCC Compliance Monitoring and Enforcement .... 559

6. Exhibit E: FRCC Funding ……………………………………. 584

VI. Regional Entity 2007 Business Plans ……………………...………….. 591

1. We address below two filings and the deferred portion of a third filing submitted by NERC Corporation (NERC).1First, on November 29, 2006, NERC submitted a compliance filing in response to the Commission’s order certifying NERC as the Electric Reliability Organization (ERO) for the continental United States.2The compliance filing consists of a Uniform Compliance Monitoring and Enforcement Program (Uniform Compliance Program) and a revised pro forma Delegation Agreement providing for the delegation of certain ERO functions and duties to Regional Entities.

2. Also on November 29, 2006, NERC submitted for Commission review, pursuant to section 215 of the Federal Power Act (FPA), 3eight unexecuted Delegation Agreements between NERC and eight proposed Regional Entities.4

3. Finally, on August 23, 2006, as amended, NERC submitted for filing NERC’s 2007 Business Plan and Budget; and a Regional Entity 2007 Business Plan and Budget for each of the eight Regional Entities. On October 24, 2006, the Commission conditionally accepted NERC’s Business Plan and Budget and conditionally accepted, in part, the Regional Entity Budgets.5However, the Commission reserved judgment on the proposed Regional Entity Business Plans, pending NERC’s submission of the Regional Entity Delegation Agreements.

4. In recent months, we have certified the ERO and established mandatory reliability standards. Today, we take the final major step forward in the transition to a strong reliability regime by providing for the enforcement of mandatory reliability standards. Specifically, we approve NERC’s pro forma Delegation Agreement, including the Uniform Compliance Program, to be used by NERC and the Regional Entities to monitor, assess, and enforce compliance with NERC’s reliability standards. We also approve each of the eight Regional Entity Delegation Agreements and attendant documents through which NERC has...

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