DRAFT Minutes Compliance and Certification Committee November 29, 2016 3:00 p.m. - 5:30 p.m. Eastern* Following Closed Session November 30, 2016 8:00 a.m. 10:30 am Eastern National Rural Electricity Cooperative Association (NRECA) Conference Center 4301 Wilson Boulevard Arlington, VA 22203 Introductions and Chair s Remarks Ms. Metro welcomed members and observers and provided safety information. NRECA Welcome Jim Spiers, Vice President, Business and Technology Strategies Mr. Spiers provided welcoming remarks and an overview of NRECA and its business activities. NERC Executive Opening Remarks Charles Berardesco, Senior Vice President and General Counsel Mr. Berardesco provided North American Electric Reliability Corporation (NERC) Executive opening remarks. He commented on how NERC has progressed over the past five years and current challenges facing industry. He highlighted the Electric Reliability Organization (ERO) Enterprise Strategic Plan and how the Compliance Certification Committee (CCC) can support the plan and the ERO Enterprise Operating Model. NERC Antitrust Compliance Guidelines and Public Announcement Ms. Metro reminded members and observers that the Antitrust Compliance Guidelines apply and the meeting was announced publicly. Agenda Items 1. Administrative Secretary and Patti Metro a. Compliance and Certification Committee (CCC) Roster Ms. Metro noted that Ms. Kruppa would replace Ms. Hecht as Secretary of the CCC at the conclusion of this meeting. The attendance sheet is appended to these minutes. There was quorum with 25/30 voting members or proxies present. Proxies: John Gasstrom, proxy for Clay Smith 2. Committee Business
a. Consent Agenda (Review) (Patti Metro) Motion: Mr. Conway moved to approve the Meeting Agenda and September 2016 Meeting Minutes in the Consent Agenda. Ms. Robertson seconded. There was no discussion, with no abstentions or oppositions. i. Meeting Agenda - (Approve) The CCC approved the meeting agenda. ii. CCC September 2016 Meeting Minutes* (Approve) (Patti Metro) The CCC approved the meeting minutes. iii. CCCPP-010 Approved (Inform) (Patti Metro) The CCC approved a motion to conduct an email vote of CCCPP-010-4. There were 21 out of 29 current members that responded, a 72 percent response rate, which is greater than the two-thirds required Therefore, quorum was achieved. One hundred percent of respondents voted to approve, which is above the two-thirds required. Therefore, the CCC approved CCCPP-010-4. b. Review of CCC Action Items* (Review) (Jennifer Flandermeyer) Ms. Flandermeyer reviewed the open action items. Mr. McIntyre reported that the Standards Committee received the data retention recommendations, which will be on the next Standards Committee meeting agenda. The report including the Standards Committee response will be on the March CCC agenda, which will close out the action item. Ms. Flandermeyer recommended closing out the action item to review, on an ongoing basis, the output from the focused feedback sessions because it is captured in the work plan. Ms. Metro agreed. No CCC members were opposed to closing the action item. c. NERC Board Enterprise-wide Risk Committee Report (EWRC) (Update) (Patti Metro) Ms. Metro provided a report of the EWRC activities at its last meeting in late October. She reported that the EWRC reviewed the CCCPP-010-4 document and the Independent Audit of Compliance Monitoring Enforcement Program (CMEP) and Organization Registration and Certification Program (ORCP) Report. d. NERC Board of Trustees and Members Representative Committee (MRC) Update from November 2016 Meetings* - (Inform) (Jennifer Flandermeyer) Ms. Flandermeyer noted that the report from the Board of Trustees (Board) and MRC meetings was included in the packet. There were no questions on the document. Mr. McIntyre commented that the notes should reflect that NERC has developed common risk factors and the notes should be changed to show that activity was completed. e. 2017 Work Plan Review and Discussion * - (Approve) (Jennifer Flandermeyer) DRAFT Compliance and Certification Committee Minutes November 29-30, 2016 2
Ms. Flandermeyer presented the 2017 Work Plan. She highlighted the revised structure of the work plan. The intent was to differentiate between ongoing work under the CCC Charter and projects for 2017. She provided an overview of the projects outlined in the work plan. Motion: Mr. Tomashefsky moved to approve the 2017 Work Plan. Mr. Xanthakos seconded the motion. The CCC members approved the motion, with no objections or abstentions. f. Focused Member Feedback Follow Up on Oversight Monitoring Tools* - (Inform) (Ken McIntyre and Patti Metro) Ms. Metro provided background on the Board s response to the CCC discussions on feedback on consistency. She reported that the Board asked that the CCC present an overview of a process on how to assist NERC in screening information on consistency so NERC can appropriately address the issues. She noted that the CCC organized a small group to help set up this process. Mr. McIntyre noted that there will be a meeting during the Board meetings with NERC and the Regional Entities to discuss consistency issues. Ms. Henson noted that there were no Texas RE registered entities on the small group. She volunteered to be a part of the group. Mr. Bilke encouraged the small group to consider any inputs from the Regional Consistency Reporting Tool and the comments from the ERO Enterprise Effectiveness Survey. g. Independent Audits* i. Status Update on Independent Audit for NERC CMEP and ORCP and Overview of 2017 Standard Processes Manual (SPM) Audit* (Inform) (Mechelle Thomas) Ms. Metro presented in lieu of Ms. Thomas. She highlighted a summary of observations that were included in the report on the CMEP and ORCP audit that was presented to the EWRC. She commented on the CCC role as observers during the CMEP and ORCP audit. She also reported on next steps for the audit of the SPM and Standards Applicable to NERC. ii. Request for participants on the SPM and Standards Applicable to NERC (SAN) Independent Audit for 2017 (Inform) (Mechelle Thomas) Ms. Metro solicited volunteers and reported that Ms. Flandermeyer would be leading the collaboration with Ms. Thomas. Ms. Metro asked that volunteers email Ms. Flandermeyer and Ms. Thomas. h. Compliance Guidance* - (Update) (Marisa Hecht) Ms. Hecht provided an update on the status of documents for proposed Implementation Guidance. She provided details on some of the documents submitted by the CCC Compliance Guidance Task Force that were not endorsed. Mr. Tomashefsky suggested that NERC include an archive of submitted documents on its website. 3. Reliability Issues Steering Committee (RISC)* - (Update) (Terry Bilke) DRAFT Compliance and Certification Committee Minutes November 29-30, 2016 3
Ms. Metro noted that Mr. Bilke would continue as CCC RISC representative. Mr. Bilke remarked that NERC includes the risk priorities in its goals and encouraged CCC members to review the RISC report. He noted that the RISC is looking for two at-large members. He also noted the upcoming Reliability Summit. 4. Subcommittee (Updates) a. Nominating Subcommittee (Helen Nalley) Ms. Nalley reported that Mr. Rhea was approved representing the Investor-Owned Utility sector and Ms. Cismaru was approved for Canada provincial sector. Mr. Terrill of the large enduse customer resigned from the CCC. b. ERO Monitoring Subcommittee (EROMS) (Ted Hobson) i. Stakeholder Perception Survey and Next Steps Mr. Hobson presented the recommendations from EROMS on the survey to the CCC. He noted that the item may be up for approval either by email to go to the February Board or at the March CCC meeting. Ms. Metro encouraged CCC members to consider joining EROMS. ii. 2016 Self-certifications of CMEP and ORCP Mr. Hobson reported that the 2016 CMEP and ORCP self-certifications documents were reviewed and would be sent to NERC in early January or February. c. Compliance Processes and Procedures Subcommittee (CPPS) (Matt Goldberg) i. CMEP Program Support 2017 Mr. Bilke provided the update. He noted that CPPS recognized a need for more outreach on controls and Compliance Guidance. ii. Regional Entity Run Clearinghouse Information Review Support Mr. Bilke noted this conversation was short due to the small group on consistency meeting the next day. He also reported that CPPS recommended outreach to industry on the Implementation Guidance that did not receive endorsement. He also noted that Mr. Lyons provided a Reliability Standard Audit Worksheet update. d. Organization Registration and Certification Subcommittee (ORCS) (Keith Comeaux) i. NERC Rules of Procedure (ROP) changes Mr. Comeaux reported that there are not proposed ROP changes, but ORCS discussed recommendations for changes to the ROP. He noted that there were some opportunities for Joint Registration Organizations, Coordinated Functional Registration, and certification. ii. Functional Model Advisory Group (FMAG) Proposed Revision Review DRAFT Compliance and Certification Committee Minutes November 29-30, 2016 4
Mr. Comeaux reported that the FMAG project is on hold until more direction comes from the NERC Board. 5. ERO Enterprise Staff Reports Including Status of CCC Work Plan Deliverables- (Updates) a. Enforcement Update (Ed Kichline and Teri Stasko) Mr. Kichline provided an update on the status of enforcement activities included in the action plans approved by the Board in November. He encouraged CCC members to review the Annual Report on the FFT and Compliance Exception Program, available here. He also highlighted some of the NERC oversight activities for the year, including NERC s review of the self-logging program. Mr. Bilke suggested coordination with industry on education or outreach on risk assessments and mitigation. Ms. Nalley noted that Regional Entities have done training for a registered entity prior to joining the self-logging program. There was discussion on how the ERO Enterprise and registered entities treat violations of different severity levels. b. Compliance Monitoring Update (Adina Kruppa) Ms. Kruppa discussed the recent activities to refine risk-based compliance monitoring. She also provided an overview of changes to the ERO Enterprise Guide for Compliance Monitoring, available here, which formerly was called the ERO Enterprise Inherent Risk Assessment (IRA) Guide. There was discussion on Compliance Oversight Plans and how they interact with IRAs. She provided an overview of how internal controls fit into compliance monitoring activities. She discussed when registered entities could expect controls conversations during compliance monitoring activities. There was discussion on how to continue messaging on controls to registered entities. c. Data Retention Action Item Update (Ken McIntyre) Mr. McIntyre reported that the recommendations were sent to the Standards Committee and would be on the next Standards Committee meeting agenda. d. WECC Mapping Project (Michael Dalebout) Mr. Dalebout presented on the process to map registered entities to Reliability Coordinators in WECC in 2016. e. Future Outreach events Update (Marisa Hecht) Outreach events were discussed throughout the meeting, so Ms. Hecht did not provide an update. 6. Member Round Table (Discussion) (Patti Metro) There was no round table discussion. 7. Review of Action Items (Review) (Jennifer Flandermeyer) DRAFT Compliance and Certification Committee Minutes November 29-30, 2016 5
Ms. Flandermeyer noted that Ms. Thomas would ask for volunteers for observers of the SPM Independent Audit. 8. Future Meeting Dates- (Inform) The 2017 Atlanta meetings will be at NERC s offices. a. March 15-16, 2017: Atlanta, GA i. Wednesday, 8:00 a.m. 5:00 p.m. and Thursday, 8:00 a.m. Noon b. May 17 18, 2017: Salt Lake City, UT (Hosted by WECC) i. Wednesday, 8:00 a.m. 5:00p.m. and Thursday, 8:00 a.m. Noon c. September 13 14, 2017: Atlanta, GA i. Wednesday, 8:00 a.m. 5:00 p.m. and Thursday, 8:00 a.m. Noon d. November 29-30, 2017: West Palm Beach, FL (Hosted by FPL) 9. Adjourn i. Wednesday, 8:00 a.m. 5:00 p.m. and Thursday, 8:00 a.m. Noon The meeting was adjourned at 10:31 a.m. Eastern. *Background materials provided DRAFT Compliance and Certification Committee Minutes November 29-30, 2016 6