Minutes Annual Meeting of the Members December 1, 2016 Washington, DC

Transcription

1 Minutes December 1, 2016 Washington, DC Renaissance Washington, DC Downtown 999 9th Street NW Washington DC, Open Session Call to Order Chair Lou Oberski called to order a duly noticed open Annual Meeting of the Members on December 1, 2016 at 9:00 am (ET). A quorum of the members of ReliabilityFirst Corporation (ReliabilityFirst) was present. A list of these members is set forth in Attachment A. A list of others present during the Annual Meeting of the Members is set forth in Attachment B. Appoint Secretary to Record Minutes Chair Oberski designated Jason Blake as the secretary to record the meeting minutes. Antitrust Statement Jason Blake advised all present that this meeting is subject to, and all attendees must adhere to, ReliabilityFirst s Antitrust Compliance Guidelines. Chair s Remarks and Welcome Chair Oberski welcomed all attendees to the meeting and introduced the key note speaker, Gerry Cauley. Key Note Speaker Gerry Cauley, President and Chief Executive Officer of the North American Electric Reliability Corporation, provided the key note address to the members. He expressed how well ReliabilityFirst is doing as a Region, and recognized ReliabilityFirst s innovative approaches and strong technical work. He then discussed current political shifts, including Mexico s desire to work with the ERO Enterprise and modernize the Mexican grid. He also discussed the ongoing changes to the generation resource mix with renewables and distributed energy, and expressed his confidence in the ERO Enterprise to lead the understanding of how these changes affect reliability. Mr. Cauley noted that the Department of Energy was recently given authority to issue emergency directives to the electric sector, and discussed whether the ERO s jurisdiction to regulate cyber security issues should be expanded into the distribution area. He stressed the importance of analytics and sound root cause analysis, and stated that misoperations, equipment failures, human error, and weather-related event are key areas of focus for the ERO Enterprise. Mr. Cauley stated that security is an ongoing priority, particularly in light of the Ukraine incident this year, and that it is important to take actions beyond the baseline requirements of the CIP Standards (such as the ES- ISAC).

2 President s Report Tim Gallagher reported that 2016 was the first year that ReliabilityFirst reached full staffing levels. He noted that Jacquie Smith has moved on to an opportunity at Allegheny Power, and thanked her for her service to ReliabilityFirst. He then reported on the success of the assist visit program over the past year, and stated that ReliabilityFirst is evaluating whether to create an assist visit waiting list or add more resources for the program. Mr. Gallagher discussed ReliabilityFirst s work with WECC and SERC on the use of maturity models to help entities pursue excellence in reliability. He then discussed the Regional Risk Assessment, and the various factors ReliabilityFirst staff examines during this effort. Mr. Gallagher noted staff s work with an entity that had cyber security deficiencies, and discussed an internal assessment performed by staff in the spirit of continuous improvement, to determine if there is anything ReliabilityFirst could have done to possibly identify these deficiencies sooner. He reported that the ERO Regional Manager group has been disbanded, and that there is now a combined NERC and Regional Manager group. He concluded by reporting that ReliabilityFirst is currently working on the next Strategic Plan, and is working to further improve the Regional Risk Assessment and Inherent Risk Assessment process and reports. Announcement of Sector Election Results - Jason Blake announced the Director election results for the Large LSE and Transmission sectors. He announced that the elected Director for the Large LSE sector is Susan Ivey (Senior Vice President, Transmission Strategy and Compliance for Exelon Corporation), and the elected Director for the Transmission sector is James Haney (Vice President, Compliance and Regulated Services, and Chief FERC Compliance Officer for FirstEnergy Service Company). Election of an At-Large Director and Independent Director Chair Oberski presided over the election of an At-Large Director; Independent Director; and Medium LSE Director. The nominees were Kenneth Capps (Senior Vice President and Chief Operating Officer for Southern Maryland Electric Cooperative, Inc.) for election as an At- Large Director; Brenton Greene (former President & CEO for Applied Communication Services, formerly Telcordia Advanced Technology Solutions) for election as an Independent Director; and Matthew Paul (Executive Director, Generation Optimization & Corporate Fuel Supply for DTE Electric Company) for election as a Medium LSE Director. The election resulted in the election of Kenneth Capps as At-Large Director; the election of Brenton Greene as Independent Director; and the election of Matthew Paul as Medium LSE Director. Attached hereto are the election results as reported by the Inspectors of Election. 2

3 2016 Financial Position of ReliabilityFirst Ray Palmieri, Senior Vice President & Treasurer, provided an overview of the 2016 financial position of ReliabilityFirst. He reported that ReliabilityFirst is presently 6% under budget, and is projected to be 4.6% under budget at year end (primarily as a result of being under budget in personnel expenses). He noted that FERC recently approved the 2017 Business Plan and Budget, and discussed the 2017 budget and assessment changes at NERC and each of the Regions. Mr. Palmieri reported that ReliabilityFirst s internal control evaluation (in which an independent third party auditor is assessing and testing the corporation s financial activities) is near completion with no fatal flaws identified. He noted that as best practices going forward, ReliabilityFirst is developing COSO risk matrices and an antifraud program. Mr. Palmieri then reported on: (1) the progress of the 2016 financial audit, which is underway; (2) the positive results of the corporation s security assessment and penetration testing; and (3) the status of the ReliabilityFirst investment account, which provided an annual gain of approximately $40,000. Comments from Members Chair Oberski provided an opportunity for Members to provide comments. No Members provided comments. Future Meeting for 2017 Chair Oberski stated that the next Annual Meeting of the Members will occur on November 30, 2017, in Washington, DC. Adjourn Upon a motion duly made and seconded, Chair Oberski adjourned the Compliance Committee meeting at 10:07 am (ET). As approved on this 9 th day of March, 2017 by the Board of Directors, Jason Blake General Counsel & Corporate Secretary 3

4 Attachment A Steven H. Giles On Behalf of Allegheny Electric Cooperative Dan Snider On Behalf of American Electric Power Service Corp Paul J. Roehr On Behalf of American Transmission Company LLC Manmohan Sachdeva On Behalf of Buckeye Power Inc. Brett Kruse On Behalf of Calpine Energy Services, LP Daniel Dasho On Behalf of Cloverland Electric Cooperative Timothy Sparks On Behalf of Consumers Energy Hertzel Shamash On Behalf of The Dayton Power and Light Company, LLC. Matthew Paul On Behalf of DTE Electric Jason Harchick On Behalf of Duquesne Light Company Jennifer Sterling On Behalf of Exelon Corporation James Haney On Behalf of FirstEnergy Services Company Michael Hatem On Behalf of Hazleton Generation, LLC David W. Sandefur On Behalf of Hoosier Energy Rural Electric Coop Inc. Brian Slocum On Behalf of International Transmission Company Lori Spence On Behalf of Midcontinent Independent System Operator Deborah Hart On Behalf of Morgan Stanley Capital Group, Inc. Silivia Parada Mitchell on Behalf of NEXTERA Energy Resources Mark Ringhausen On Behalf of Old Dominion Electric Cooperative Robert Eckenrod On Behalf of PJM Interconnection LLC Donald Holdsworth On Behalf of Public Service Enterprise Group, Inc. Edward Bedder on Behalf of Rockland Electric Company David Viar on Behalf of Southern Maryland Electric Cooperative, Inc. Elizabeth Davis on Behalf of Talen Energy Supply, LLC Jon Luttrell on Behalf of Vectren Energy Delivery of Indiana, Inc. Susan Sosbe on Behalf of Wabash Valley Power Association, Inc. Anthony Jankowski On Behalf of Wisconsin Electric Power Company Sandra Revnell on Behalf of Wolverine Power Supply Cooperative, Inc. 4

5 ATTACHMENT B Others Present During the Annual Meeting of Members Lisa Barton AEP Jason Blake ReliabilityFirst, General Counsel & Corporate Secretary Thomas Breene WEC Energy Group Roberta Brown Sassafras River Associates Michael Bryson PJM Larry Bugh ReliabilityFirst James Burlew PJM Ken Capps SMECO Pat Cass Independent Director Gerry Cauley NERC John Collins Fox Guard Solutions Jeff Craigo ReliabilityFirst Carl Dister ReliabilityFirst Rod Eckenrod PJM Tim Gallagher ReliabilityFirst, President & CEO Megan Gambrel ReliabilityFirst Joe Gardner MISO Brent Greene Independent Directors Jim Haney FirstEnergy Debbie Hart Morgan Stanley Capital Group Doug Hils Duke Energy Mark Holman PJM Larry Irving Independent Director Sue Ivey Exelon Anthony Jablonski ReliabilityFirst Tammy Leaver ReliabilityFirst Deandra Williams-Lewis ReliabilityFirst Jill Lewton ReliabilityFirst Ray Mason ReliabilityFirst Jeff Mitchell ReliabilityFirst Lou Oberski Dominion Energy Ray Palmieri ReliabilityFirst, Senior Vice President Matt Paul DTE Energy Paul Roehr American Transmission Company Mohan Sachdeva Buckeye Power Hertzel Shamash Dayton Power and Light Brian Slocum ITC Holdings Corp Lori Spence MISO Jennifer Sterling Exelon Roy Thilly NERC Board of Trustees Jody Tortora ReliabilityFirst Jim Uhrin ReliabilityFirst 5

6 Bob Wargo ReliabilityFirst, Vice President Simon Whitelocke ITC Holdings Stanley Williams PJM 6

7 7 Minutes December 1, 2016

8 8 Minutes December 1, 2016