Development of the Electric Reliability Organization Kim Warren - PowerPoint PPT Presentation

Development of the Electric Reliability Organization Kim Warren Manager - Regulatory Affairs Technical Panel – May 23, 2006

Outline 1. History of Electric Reliability Organization (ERO) Developments 2. North American Electric Reliability Council (NERC) Structure 3. Northeast Power Coordinating Council (NPCC) Structure 4. IESO Involvement in the ERO Development Process 5. NERC’s Application to be the ERO 6. Changes in Ontario 7. Next Steps 2

Regional Councils in North America 3

History of ERO Developments • NERC is the governing standards setting body for the reliable operation and planning of the bulk electric system • NERC is made of up the eight regional reliability councils which support NERC’s activities • The ERO entity has been anticipated by the IESO, and its predecessors, since the 90’s • The ERO is needed to establish mandatory and enforceable reliability standards in the U.S. • Mandatory compliance with NERC standards and NPCC criteria as part of the market rules in Ontario has been since May 2002, market opening 4

History of ERO Developments • The current ERO movement is a result of the aftershock following the August 2003 blackout and the passage of the U.S. Energy Policy Act in August 2005 • In the U.S., the ERO will: 1. Develop reliability standards 2. Enforce reliability standards 3. Produce periodic reliability assessment reports 5

History of ERO Developments • NERC applied to the Ontario Energy Board (OEB), other provincial regulators and Federal Energy Regulatory Commission (FERC) on April 4, 2006 to be recognized as the North American ERO • NERC is expected to begin operating with the ERO designation on January 1, 2007 6

NERC Structure (Today) • NERC is currently funded from its membership of eight regional councils including the NPCC • The IESO funds NERC through fees paid to NPCC • NERC performs the following functions: – Standards development – Compliance and readiness audits – Operator Training and Certification – Operating Tool Support Programs 7

NERC Structure (as the ERO) • NERC will transition to not ‐ for ‐ profit corporation known as the North American Electricity Corporation (still use NERC acronym) • NERC will have an open and a non ‐ fee based membership. The IESO will become a member • NERC will delegate compliance and some standard development functions to the Regional Entities (See NPCC later) 8

NPCC Structure (Today) • The NPCC is one of eight regional reliability councils that make up NERC (Council) • NPCC covers Ontario, Quebec, the Maritimes, New York and New England • NPCC performs the following functions: – Develops operating criteria, procedures and guides (including adequacy, operating reserve, etc.) – Performs regional compliance audits on the area member – Planning coordination 9

NPCC Structure (Future) 10

IESO Involvement • ISO/RTO Council (IRC) • Canadian Electricity Association (CEA) • IESO presentations and speeches in U.S. (FERC, Department of Energy, Congressional Committee, etc.) • NERC’s Post Legislative Steering Committee • Federal ‐ Provincial ‐ Territorial Working Group • Bilateral Electricity Reliability Oversight Group (BEROG) 11

NERC’s Application to be the ERO • ERO Recognition: – Applications for recognition filed simultaneously with Ontario, Alberta, Nova Scotia, the National Energy Board and FERC in the U.S. – NERC submitted notice of filings with the other provinces • Reliability Standards: – Separate submission to deal with the 102 NERC standards to the provinces, NEB and FERC • OEB intends to acknowledge NERC’s applications • IESO supported NERC as the North American ERO and NERC’s reliability standards in our May 8 th letter to the OEB. 12

NERC’s Application to be the ERO • ERO applications (and notices) contain: – NERC’s Certificate of Incorporation – Corporation Bylaws • Defines members’ rights, board’s function and authority, budgets, etc. – Rules of Procedure • Defines the process and procedures to enable the ERO to develop and enforce reliability standards • Processes describe the interaction and obligations of NERC, regions, regulators and the users, owners and operators of the bulk power system 13

Changes in Ontario • The Ministry of Energy, the OEB, and the industry support the merits of the Ontario compliance model • There could be some “minor” changes in Ontario (standards awareness/coordination etc.) • Specifics of the OEB and NERC relationship will be finalized in an Memorandum of Understanding (MOU) 14

Changes in Ontario Proposed OEB OEB OEB Ontario Framework MOU with the ERO ERO ERO ERO IESO IESO IESO Participant Participant Participant 15

Next Steps • IESO ERO Workshop in late June • NPCC bylaws and procedures • MOUs with NERC and possibly others • Ministry of Energy intends issue a letter recognizing NERC as the North American ERO • On going involvement in FERC’s review of the proposed NERC’s reliability standards 16

17 Questions?