Settlement Negotiations

Settlement Negotiations Richard Mabry Senior Compliance Engineer Settlement Negotiations Summary ● CMEP Guidelines ● Settlement Timelines ● WECC Process for Settlements ● Settlement Agreement 2 Settlement Negotiations CMEP Guidelines ● Settlements can be requested at any time before NOAV up until NOP is filed at FERC. ● Discussions are Confidential. ● Regional Entity (RE) must designated authorized representative to negotiate. ● Settlements are filed with and approved by NERC. ● Once approved, RE waives right to further appeal. 3 Settlement Negotiations CMEP Guidelines ● If NERC rejects settlement, WECC and RE must try to re-negotiate. ● NERC files settlement with FERC.  FERC Must Approve. ● Results of settlements are made public. ● Settlement does not require an admission of guilt. 4 Settlement Negotiations Timelines (WECC Interpretation) ● If settlement is requested before NOAV  NOAV is placed on hold.  If settlement is reached, NOAV will not be sent. 5 Settlement Negotiations Timelines (WECC Interpretation) ● If settlement is requested after NOAV  WECC and RE are bound by timelines in CMEP  WECC must schedule a settlement conference within 10 business days of RE Response to NOAV.  WECC and RE have 40 days from RE response date to reach settlement.  Can request extension from NERC.  NOCV placed on hold. 6 Settlement Negotiations Timelines (WECC Interpretation) ● If a hearing is already underway  RE can request settlement negotiations  Hearing is placed on hold  NOCV stays on hold 7 Settlement Negotiations Timelines (WECC Interpretation) ● If requested after NOCV  Opportunity for settlement negotiations is very limited or may not exist. 8 Settlement Negotiations WECC Process ● What can be contested?  Violations (under limited circumstances)  Penalties  Sanctions 9 Settlement Negotiations WECC Process ● Reasons for contesting  Violations  Error or oversight from compliance staff (i.e. RE assessed violation for a non-applicable requirement)  Penalties and Sanctions  Penalties and/or sanctions appear excessive.  WECC did not consider aggravating or mitigating factors appropriately. 10 Settlement Negotiations WECC Process ● Initiating Settlements  RE must send formal letter to WECC  Letter must include:  Violations being contested  Penalties being contested  Sanctions being contested  Reasons for protest 11 Settlement Negotiations WECC Process ● Participation in settlement negotiations  WECC Compliance Staff and Attorney  RE person designated to negotiate on behalf of registered entity.  RE personnel necessary for negotiations  RE Attorney ● WECC may choose to limit the number of participants to facilitate efficient discussions 12 Settlement Negotiations WECC Process ● Location for settlement negotiations  WECC Offices  Salt Lake City, UT  Vancouver, WA ● WECC and registered entity may mutually agree to participate at a different location. 13 Settlement Negotiations Settlement Agreement ● Will include:  Terms and Conditions  Agreed adjustments to penalties and/or sanctions  Any violation retractions ● Will be signed by WECC Vice president and Director of Compliance and RE authorized representative. ● Must use NERC template ● Filed with and approved by NERC and FERC 14