Meeting Minutes Compliance and Certification Committee September 16, :00 p.m. - 5:00 p.m. CT September 17, :00 a.m.

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1 Meeting Minutes Compliance and Certification Committee September 16, :00 p.m. - 5:00 p.m. CT September 17, :00 a.m. - Noon CT JW Marriott New Orleans 614 Canal Street New Orleans, LA Introductions and Chair s Remarks Ms. Metro called the meeting to order and provided safety information. Members and observers introduced themselves. NERC Antitrust Compliance Guidelines and Public Announcement Ms. Metro reminded participants that the NERC Antitrust Compliance Guidelines apply and that the meeting was publicly announced. Agenda Items 1. Administrative Secretary and Patti Metro a. Compliance and Certification Committee (CCC) Roster [LINK] Proxies for this meeting include the following individuals: Summer Esquerre proxy for Silvia Mitchell Christina Bigelow proxy for Leland McMillan Thomas McDonald proxy for John Hairston 2. Committee Business a. Consent Agenda Mr. DeLoach moved to approve the consent agenda items. Motion approved. i. Meeting Agenda (Approve) Ms. Metro noted the addition of an agenda item to approve the CCC charter changes based on the FERC order issued August 21, ii. CCC June 2015 Meeting Minutes* (Approve) Patti Metro [LINK] b. Review of CCC action items * Jennifer Flandermeyer Ms. Flandermeyer reviewed the status of action items. Ms. Metro noted that the CCC will move its start time ahead one hour for the December meeting.

2 c. NERC Board Enterprise-wide Risk Committee report Patti Metro Ms. Metro provided an update from the Enterprise-wide Risk Committee (EWRC) meeting. She noted that the CCC received positive feedback during the Board meeting on its activities. d. NERC Board and MRC Update from August 2015 meetings* Jennifer Flandermeyer Ms. Flandermeyer noted that the update is included in the agenda package. e Work Plan Review and Discussion * - (Approve) Jennifer Flandermeyer Ms. Flandermeyer provided an overview of the 2016 Work Plan. She highlighted project 12 which allows the CCC to revise its work plan in Q1 based on the new ERO Strategic Plan. Mr. Goldberg moved to approve the 2016 Work Plan, and Mr. Temple seconded it. The CCC approved the work plan with no objections and no abstentions. f. Independent Audits* i. Planning for Independent Audit Schedule for upcoming NERC CMEP and ORCP Mechelle Thomas Ms. Thomas provided background on the upcoming audit of NERC s Compliance Monitoring and Enforcement Program (CMEP) and Organization Registration and Certification Program (ORCP). CCC members participating in the audit as observers would receive training after the conclusion of the meeting. 3. Reliability Issues Steering Committee (RISC) Update * Terry Bilke Mr. Bilke provided an update on the RISC activities and the recent 2015 Leadership Summit. He noted that a RISC report would be submitted to the Board of Trustees Compliance Committee (BOTCC) in November as information only. The link to last year s report is located here. In addition, he presented the proposed metrics. 4. Guidance Update Patti Metro and Steve Noess Mr. Noess described the Compliance Guidance Policy team and its activities. He noted that the team developed a proposal posted for comment. He outlined the proposal s two-pronged approach to providing compliance guidance. There was discussion on the involvement of the CCC and other standing committees in developing the guidance. There was also discussion on whether development of guidance would preclude other approaches that could meet the Reliability Standard. Mr. Noess and Ms. Metro would provide an update on next steps at the December CCC meeting. 5. Charter (Approve) This agenda item was added during the meeting. The CCC reviewed revisions to the CCC charter based on the FERC directive to revise the language on composition of the hearing body to match the CCC hearing procedures. Ms. Metro noted that the FERC order confirmed that the CCC charter needs to go to FERC for approval. DRAFT Compliance and Certification Committee Minutes September 16-17,

3 Ms. Jones moved to approve the revised charter, and Mr. Deloach seconded the motion. The motion passed with no objections and no abstentions. 6. CIP v5 Technical Guidance Update Helen Nalley and Ben Engelby Mr. Engelby provided an update on the meeting regarding the way forward for CIP version 5 transition topics. He covered the memoranda topics that had been withdrawn. Ms. Nalley provided an update on the issuance of recent and upcoming lessons learned. She described the team composition of the Version 5 Transition Advisory Group (V5TAG) and encouraged CCC members to comment on the papers issued by V5TAG. 7. Subcommittee Updates a. Nominating Subcommittee * Helen Nalley i. CCC Sector openings and upcoming activities On behalf of the CCC, Ms. Metro thanked Mr. Temple for his work on the CCC. Mr. Temple will continue to work with the CCC as an observer after his retirement. Ms. Metro reported that Mr. Kopman would solicit NPCC registered entities to fill the position. Mr. Hairston s position will be open due to a promotion. Mr. Spearman recommended that the CCC solicit a federal government position for the West but noted that it needs to be coordinated with NARUC. Ms. Metro noted that the CCC Charter discusses resignations and the CCC and NERC would review it further next year. NERC will coordinate with the CCC to issue a solicitation for nominations. b. ERO Monitoring Subcommittee (EROMS) Ted Hobson i Stakeholders Perception Survey analysis and Board reporting (Approve) Mr. Hobson noted that EROMS made some changes to the report the CCC had received prior to the meeting. He reviewed the changes and noted that the CCC would vote on it at the second day of the meeting after reviewing the changes the first day. There was discussion regarding recommendations relating to Joint Registered Organizations/Coordinated Functional Registration with third-party delegation agreements and the recommendation of the CCC to address internal controls. There was discussion regarding the recommendation on planning functions. There was discussion regarding the primary compliance contacts that received the survey. Some CCC members requested that EROMS consider which contacts are appropriate for the survey and to review Canadian participation. Mr. Hobson moved to approve the survey report as revised, and Mr. Terrill seconded. The motion passed. ii. Self-certifications DRAFT Compliance and Certification Committee Minutes September 16-17,

4 Mr. Hobson provided an update on the self-certifications from NERC. He noted that CMEP and ORCP were completed this year and that they have not completed Standard Processes Manual (SPM) or Standards Applicable to NERC (SAN). SPM and SAN self-certifications will be completed next year. He stated that starting April 1, 2016 there would be no SAN selfcertifications. However, there will be self-certifications requested next year for SAN and SPM to cover c. Compliance Processes and Procedures Subcommittee (CPPS) Matt Goldberg Mr. Goldberg provided an update on the CPPS meeting. i. CCCPP-010 updates and Risk-Based CMEP implementation progress o Regional Entity coordination and involvement with CCCPP-010 Mr. Goldberg noted that CPPS will consider updating this procedure document after more implementation time for risk-based CMEP. ii. Status and Overview of 2016 CMEP / Risk Elements Mr. Goldberg presented an update on the recently released ERO Enterprise Risk Elements. iii. RSAW coordination o Review RSAWs that are in process for new Standards Mr. Goldberg reported on the CPPS discussion on documentation regarding guided selfcertifications. o CCC RSAW review criteria Mr. Goldberg reported on the CPPS discussion regarding RSAW review and noted that it has been a productive effort thus far. iv. Quality Review form for Risk-Based CMEP principles Mr. Goldberg reported on the experience of the CPPS during its quality review of Reliability Standards. CPPS will share observations on compliance feasibility questions with NERC standards development staff. o CCCPP-010 updates and Risk-Based CMEP implementation progress Mr. Goldberg reported that CPPS reviewed its activities under the 2015 and 2016 CCC Work Plans. d. Organization Registration and Certification Subcommittee (ORCS) Keith Comeaux i. Risk Based Registration (RBR) update DRAFT Compliance and Certification Committee Minutes September 16-17,

5 Mr. Brinker delivered an update on the status of RBR to the CCC. He noted that phase 2 did not identify a set of low-risk GO/GOP and TO/TOP entities, so entities must individually go to a NERC-led panel if they believe they are lower risk. He noted that this update will be provided to the Board. ii. Organization Certification update Mr. Comeaux noted that ORCS will look to improve certification processes now that RBR is coming to a close and has freed up resources. 8. NERC Staff Reports Including Status of CCC Work Plan Deliverables a. Risk-based Compliance Monitoring and Enforcement (CMEP) i. Risk-based Compliance Assurance and Enforcement update Steven Noess and Ed Kichline Mr. Noess presented on the 2016 CMEP Implementation Plan. He encouraged CCC members to review NERC s quarterly reports to the Board on metrics supporting the success factors to implement risk-based compliance monitoring. The August report is located here. Mr. Kichline provided an update on an upcoming filing describing implementation of risk-based enforcement. ii. Organization changes for Risk-based Compliance Assurance and Enforcement Steven Noess Mr. Noess described the new roles of the risk analysis group in Compliance Assurance. b. NERC funding and LSE function reference Steven Noess Mr. Brinker clarified that Load-serving Entity (LSE) de-registration does not affect funding because it is part of the functional model. He noted that the NERC Compliance Registry sets an entity s compliance responsibilities, not its funding. Ms. Metro noted that the CCC will address the question on jurisdiction when the LSE does not have compliance obligations but provides funding at the December meeting. c. Future Outreach events Update - Marisa Hecht Ms. Hecht provided an update on the upcoming Standards and Compliance workshop in San Diego, which will cover risk-based CMEP updates. She also noted that the small entity internal controls evaluation exercise will not occur in the fall. i. Fall Industry Outreach event ii. Fall 2015 Standards and Compliance Workshop update iii. Small Entity Internal Controls Evaluation Exercise d. Transmission Company Registration Update Terry Brinker DRAFT Compliance and Certification Committee Minutes September 16-17,

6 Mr. Brinker will provide this update in December. 9. Overview of ERO Auditor Training Completion of IRA / ICE Steven Noess There was no discussion on this item. 10. Member Round Table Patti Metro Mr. DeLoach suggested that CCC members invite Regional Entities to their organizations to walk through guidance on CIP Version Review of Action Items and CCC Work Plan Deliverables Ms. Flandermeyer reviewed action items for the CCC. 12. Future Meeting Dates a. December 2-3, 2015: Atlanta, GA (NERC) The schedule for this meeting will shift ahead one hour. Executive committee will begin at 8 a.m. Eastern, and the subcommittee meetings will begin at 9 a.m. Eastern on December 2 nd. b. March 1-2, 2016: Atlanta, GA (NERC) c. June 15-16, 2016: Folsom, CA (CAISO offices) d. September 14-15, 2016: TBD located with other standing committees e. November 29-30, 2016: Arlington, VA (NRECA offices) 13. Adjourn *Background materials provided DRAFT Compliance and Certification Committee Minutes September 16-17,

Meeting Minutes Compliance and Certification Committee March 3, :00 p.m. - 5:00 p.m. ET March 4, :00 a.m. - Noon ET

Meeting Minutes Compliance and Certification Committee March 3, 2015 1:00 p.m. - 5:00 p.m. ET March 4, 2015 8:00 a.m. - Noon ET NERC Corporate Offices 3353 Peachtree Rd NE, Suite 600 North Tower Atlanta,