Compliance Open Webinar Wildfire Edition August 20, 2020 Travis - - PowerPoint PPT Presentation

August 20, 2020

Travis English Training & Outreach Specialist Compliance Open Webinar Wildfire Edition

Pre-Meeting Statements

▪ All WECC meetings are conducted in accordance with the WECC Antitrust Policy and the NERC Antitrust Compliance Guidelines ▪ All participants must comply with the policy and guidelines ▪ This meeting is public—confidential or proprietary information should not be discussed in open session

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Pre-Meeting Statements

▪ This webinar is being recorded and will be posted publicly ▪ By participating, you give your consent for your name, voice, image and likeness to be included in that recording ▪ WECC strives to ensure the information presented today is accurate and reflects the views of WECC ▪ However, all interpretations and positions are subject to change ▪ If you have any questions, please contact WECC’s legal counsel

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Webinar Use

▪ You have been automatically muted on entry ▪ Questions will be answered at the end of the presentation.

• Speak and raise your hand!
• Use the Q&A feature

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Agenda

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▪ Reliability & Security Workshop and Internal Controls Practices Group

• Steve Goodwill—Senior Vice President of Reliability and Security Oversight,

General Counsel and Secretary ▪ The Align Project Transition Report

• Michael Dalebout—Manager of Enforcement Operations

▪ Wildfire Risks and Internal Controls

• Ari Barusch—Associate Enforcement Attorney
• Sherri Palmer—Senior Internal Controls Specialist
• Vegetation Program Management
• Equipment Inspection Program Management
• Equipment Inventory Program Management
• Alerts and Early Warnings Program Management

August 20, 2020

Steve Goodwill Senior Vice President of Reliability and Security Oversight, General Counsel and Secretary

Reliability & Security Workshop and Internal Controls Practices Group

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Reliability & Security Webinar—Tuesday, October 27

▪ Digital learning opportunity ▪ Free registration for all stakeholders

• Available at wecc.org

▪ Split into two sections:

• Operations and Planning—morning sessions
• Critical Infrastructure Protection—afternoon sessions

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Contact:

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Steve Goodwill Senior Vice President of Reliability and Security Oversight, General Counsel and Secretary sgoodwill@wecc.org

August 20, 2020

Michael Dalebout Manager of Enforcement Operations

The Align Project: Transition Report

The Align Project

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Contact:

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Michael Dalebout Manager of Enforcement Operations mdalebout@wecc.org

August 20, 2020

Ari Barusch Associate Enforcement Attorney Sherri Palmer Senior Internal Controls Specialist

Wildfire Risks, and Internal Controls

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Welcome

▪ WECC encourages entities to take proactive wildfire risk mitigation actions ▪ WECC believes that effective development and execution of internal controls lowers the risk of wildfires ▪ WECC would like to work with you today and going forward on your internal controls journey

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Forces Driving Change

Why are internal controls important?

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Need For Internal Controls

Internal Inefficiencies & Increasing Compliance Violations Emerging Risks & Delayed Compliance Requirements Legacy Equipment, Lost Expertise, & SME Turnover Organizational Structure & Behavior Third-Party Contractor Training & Awareness Needs NERC Maturing to Risk-Based Monitoring Approach

Risk & Internal Controls Relationship

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Risk

Identify Assess Control

Managing Your Vegetation Management Program

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FAC-003-4

Understanding Risks—FAC-003-4

Using Potential Failure Points and Guidance Questions

▪ During your last vegetation inspection, did you consider encroachments from trees/plants beyond your right of way? ▪ Do you have accurate and current records identifying where all your hazard trees are? ▪ Have you been working with federal agencies to ensure all shared responsibilities have been identified and you clearly understand your responsibilities? ▪ How do you ensure that vegetation management programs adapt to changing conditions (climate changes, wildfire historical data, use of new technology, etc.)?

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Additional Risks Considerations

Cooperating With Federal Agencies ▪ Do you have transmission lines or other equipment on federal land? ▪ Do you know what agency oversees that land? ▪ Are you checking in with the closest field office? ▪ Instructional Memorandum 2018-070 (Bureau of Land Management) ▪ Do you have transmission lines or other equipment on private land?

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FAC-003-4

R1: Each applicable Transmission Owner and applicable Generator Owner shall manage vegetation to prevent encroachments into the Minimum Vegetation Clearance Distance (MVCD) of its applicable line(s), which are either an element of an IROL, or an element of a Major WECC Transfer Path; operating within their Rating and all Rated Electrical Operating Conditions of the types shown below:

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Internal Control Recommendations

Internal Controls—People, Process, and Technology Mitigation Strategies

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Internal Controls

Climate Models Specialized Skills Threshold Conditions Systems & Controls Risk Forecasting ROW Legal Rights

Public Lands: 43 USC S. 1772

• 1. The term "hazard tree" means any tree or part

thereof (whether located inside or outside a right-

• f-way) that has been designated, prior to tree

failure, by a certified or licensed arborist or forester

(A) dead, likely to die within the routine vegetation management cycle, or likely to fail within the routine vegetation management cycle; and (B) if the tree or part of the tree failed, likely to- ▪ (i) cause substantial damage or disruption to a transmission or distribution facility;

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▪ (ii) come within 10 feet of an electric power line

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3. If vegetation or hazard trees have contacted

• r present an imminent danger of contacting an

electric transmission or distribution line from within or adjacent to an electric transmission or distribution right-of-way, the owner or operator of the electric transmission or distribution lines-

(1) may prune or remove the vegetation or hazard tree- (A) to avoid the disruption of electric service; and (B) to eliminate immediate fire and safety hazards; and (2) shall notify the appropriate local agent of the Secretary concerned not later than 1 day after the date of the response to emergency conditions.

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Managing Your Equipment Inspection Program

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FAC-501-WECC-2

Understanding Risks—FAC-501-WECC-2

Using Potential Failure Points and Guidance Questions ▪ How do you detect and remedy an incomplete inspection? ▪ How do you ensure that all inspection test results requiring actions have been addressed? ▪ If an SME is not available for the scheduled inspection, how do you become aware of the potential constraints, and how do you plan for other SMEs with the required specialization to meet the needs of the inspection?

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Understanding Risks—FAC-501-WECC-2, cont.

Using Potential Failure Points and Guidance Questions

▪ Did you consider all upstream and downstream equipment, including monitoring equipment, within the Equipment Inspection Program? ▪ How do you ensure that ALL wildfire hazard equipment has been identified and formally documented? ▪ How do you ensure you have identified and included all equipment that could be at risk for overload and spark in your Equipment Inspection Program?

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FAC-501-WECC-2

▪ R1: Each Transmission Owner shall have a Transmission Line Maintenance and Inspection Plan (TMIP) that includes, at a minimum, each of the items listed in Attachment A, Transmission Maintenance and Inspection Plan Content ▪ R2: Each Transmission Owner shall annually update its TMIP to reflect all changes to its TMIP ▪ R3: Each Transmission Owner shall adhere to its TMIP

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Internal Control Recommendations

Internal Controls—People, Process, and Technology Mitigation Strategies

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Internal Controls

Proactive Hardening the Grid Specialized Skills QA Checkpoints in Process

Inspection Tracking Systems & Controls

Effective Methods Cross Training

Build an Equipment Baseline

What to include in Equipment Baseline Documentation:

• One-line diagrams
• FAC-003-4 data
• Base case data
• SOL information
• Physical inspection validation
• Previous internal audits list of facilities
• Attachment 2 of MOD-025 (generator testing) results

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Managing Your Equipment Inventory Program

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FAC-008-3

Understanding Risks—FAC-008-3

Using Potential Failure Points and Guidance Questions

▪ How do you ensure your equipment rating records are accurate and complete? Do you reconcile drawings and documentation to an actual, facility physical inventory? How do you resolve differences? ▪ Does your documentation fully support conclusion and decisions on final rating evaluation? ▪ How do you account for equipment repairs or total losses in your inventory change management process? ▪ Does your organizational structure, e.g., silos, contribute to lack of communication? Compliance violations? Inaccurate information? ▪ Could a third-party technician change equipment without causing a necessary inventory record update? Do you provide training to third parties.

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Understanding Risks—FAC-008-3 , cont.

Using Potential Failure Points and Guidance Questions

▪ Does your Facility Ratings Program include all equipment from new construction, facility reconfiguration, etc.? ▪ How do you accurately rate “legacy systems” that do not have supporting documentation? ▪ Does your method ensure that complex analysis for the most limiting element is accurately determined? And, are all decisions and judgements retained on dated and approved documentation? Have you identified an “Authorized Approver”? ▪ Did you work with Joint Owners on “Demarc” determination? Are these decisions formally documented and approved by an “Authorized Approver”?

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Internal Control Recommendations

Internal Controls—People, Process, and Technology Mitigation Strategies

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Internal Controls

Detailed Method Accuracy & Completeness Checklists Access Controls & Authorized Approvers Inventory Systems & Controls Approved Rating Decisions Physical Inventory Reconciliations

Internal Control Maturity

Level 1

No or few internal controls activities designed or in place.

Level 2

Internal controls activities in place, but not adequately documented. Little to no training or communication on expected internal controls.

Level 3

Internal controls activities designed and adequately documented but not standardized across the

• rganization.

Deviations may not be detected in time.

Level 4

Standardized internal controls with periodic testing. Automation and tools my be used to support internal controls activities.

Level 5

Integrate internal controls with real- time monitoring. Automation and tools are used to support internal controls activities

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Unreliable Informal Formalized Monitored Optimized

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Managing Your Early Warnings & Alerts Program

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EOP-011-1

Understanding Risks—EOP-011-1

Using Potential Failure Points and Guidance Questions

▪ What communication methods do you use to notify your TOPs of your Operating Plan? ▪ Have you considered testing your Operating Plan recovery process and procedures during a CIP-008 Recovery Plan test? ▪ When you test your Operating Plan—Simulations and Emergency Drills, do you use less-experienced personnel to carry out important test steps? ▪ Do you conduct a “lessons learned” session after Simulations and Emergency Drill Testing? Do you discuss how well you followed your methodology?

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Understanding Risks—EOP-011-1, cont.

Using Potential Failure Points and Guidance Questions

▪ Does your Operating Plan meet the load requirements in case of emergency (it has all the elements, but they don’t meet the goals)? Do you include these back-up and dependent elements in your Operating Plan recovery testing? ▪ Do you periodically verify your third-party contracts are current and they address contractual obligations about potentially purchasing energy from a third party in an emergency? ▪ Do you keep comprehensive documentation on Simulations and Emergency Drill Test methods? Does it contain relevant details about the simulations test plans and expected results?

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EOP-011-1

Each Transmission Operator shall develop, maintain, and implement one or more Reliability Coordinator-reviewed Operating Plan(s) to mitigate operating Emergencies in its Transmission Operator Area…

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Internal Control Recommendations

Internal Controls—People, Process, and Technology Mitigation Strategies

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Internal Controls

Communication Plan Testing & Simulation System Training Know Your Equipment Al Alert & Early Warning System Controls Situation Awareness

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What should you do next?

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▪ Rejuvenate training and awareness ▪ Know your risks, weaknesses, and strengths ▪ Know your facility’s ROWs & legal position at all times ▪ Know your neighbors ▪ Design and implement internal controls ▪ Integrate advanced technology, when it makes sense ▪ Monitor your progress—build metrics ▪ Stack your documentation ▪ Continue to work with WECC Internal Controls Resources ▪ Attend Internal Controls Practices Group: September 30, 2020

Additional Resources

▪ September 30—WECC Internal Controls Practices Group ▪ Instructional Memorandum 2018-070 (Bureau of Land Management) ▪ FAC-003-3 Minimum Vegetation Clearance Distances, NERC, May 12, 2015 ▪ 43 CFR s. 2805.12 ▪ 43 USC S. 1772 ▪ WECC Potential Failure Points—FAC-008 ▪ WECC Potential Failure Points—FAC-003

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Contact:

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Ari Barusch—Associate Enforcement Attorney abarusch@wecc.org Sherri Palmer—Senior Internal Controls Specialist shpalmer@wecc.org