Rural Electric Cooperative Template of Strategic Planning by rwe16268


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									Culture of Compliance for
 Registered Entities and
 Compliance Resources
WECC Compliance Webinar
    January 14, 2011

 Nathan Mitchell – Director of Electric
  Reliability Standards & Compliance
  American Public Power Association


•   APPA at-a-glance
•   Culture of Compliance
•   Compliance Resources
•   APPA/NRECA NERC Compliance Manual
•   APPA is the Industry Trade Association for more than 2,000
    community-owned electric utilities,
•   Public power serves over 45 million people or about 14 percent of the
    nation's electricity consumers.
•   Public power utilities are operated by local governments to provide
    communities with reliable, responsive, not-for-profit electric service.
•   Some of the nation's largest cities – Los Angeles, San Antonio, Seattle
    and Orlando – operate publicly owned electric utilities, but many public
    power communities are small with their utilities serving 3,000 or fewer
• Public power NERC Registered Entities (REs):
  –   Currently have 330 public power REs
  –   297 of those are designated as DP, LSE or both
  –   100 REs are in the WECC region
  –   A few public power Joint Action Agencies serve as the
      Joint Registration Organization for their members
         FERC Policy Statements
       Compliance and Enforcement
• Provide guidance and regulatory certainty
• Identify the factors considered in
  determining penalties and the amount
• Identifying factors that FERC considers
  when it evaluates a utility’s “commitment to
          FERC Policy Statement
• Four core elements of an effective
  compliance program;
 – Active engagement and leadership by senior
 – Preventative measures that are effective in
 – Prompt detection of problems, cessation of
   misconduct, and reporting of violations
 – Remediation of the misconduct
            Culture of Compliance
• No written requirement to have a “culture of
• Highly recommended – and expected
• Potentially avoid violations
• Utilized to minimize the significance of any
  detected potential violations
          Culture of Compliance
• Well documented
 – Explicit vs. Implicit
 – Updated as required and at least annually
 – Approved by appropriate management officials
            Culture of Compliance
• Training/Awareness programs
 – Formal training for those directly responsible for
   compliance (ownership of standard or process)
 – Formal training - compliance reporting process
 – Awareness for all employees and contractors;
   analogous to safety program
APPA & NRECA NERC Compliance Manual

• Developed as a joint project between APPA and
  NRECA following member request for guidance
• Assist in the development of member internal
  Compliance Programs
• Assist members in completing NERC/RE
  Compliance Monitoring and Enforcement Program
  (CMEP) requirements
         NERC Compliance Manual

Three documents comprise the guide:

• NERC Compliance Overview

• NERC Compliance Plan Users Guide

• Sample Compliance Plan
        NERC Compliance Overview

• Helps to minimize the likelihood of violations
• Provides a framework to demonstrate a proactive
  approach to adhering to the CMEP requirements
• Includes background information of events leading
  up to the present mandatory Reliability Standards
• Describes the FERC, NERC/RE framework
• Establishes compliance responsibilities and
  monitoring framework
         Compliance Plan User’s Guide

•   Process to achieve and maintain compliance
•   Discussion of functional designations
•   Joint Registration Organization (JRO)
•   Process to respond to potential violation(s)
•   Roles and responsibility of all staff
•   Process to manage information and records
•   Process to track compliance activity
     Sample Compliance Plan (Template)
• Describes the elements of the utility’s obligations and
  responsibilities with NERC/RE standards
• Establish a culture of compliance
• Define the Corporate Compliance Structure
• Define Roles and Responsibilities
• Establish training requirements
• Assist in mitigation of sanctions/penalties
• Assist in preparing for audits, spot checks and self-
• Describes the Documentation Requirements
       Organizational Structure
                                Board of Directors

                                General Manager /

                 VP Corporate                          VP Corporate
                                   VP Operations
                   Finance                               Services
                    “Name”                                “Name”

                                                     NERC Compliance

               System O&M         System Planning
                 Manager              Manager
                  “Name”              “Name”

Supervisor I   Supervisor II         Engineer I         Engineer II
           Compliance Staff Structure
                                           NERC Compliance

                   NERC Compliance                                 NERC Compliance
                   Process Manager                                     Analyst
                       “Name”                                          “Name”

                  Cyber Security Project                            NERC Compliance
                        Manager                                    Engineering Support
                         “Name”                                          “Name”

  Department or Facility                Department or Facility                             Department or Facility
   NERC Coordinator                      NERC Coordinator                                   NERC Coordinator
            &                                     &                                                  &
Cyber Security Coordinator            Cyber Security Coordinator                         Cyber Security Coordinator
       Sample Compliance Plan (cont.)

• Uses for the Sample Compliance Plan:
  – Baseline for developing a new compliance plan
  – Checklist for evaluating an existing compliance plan
        Sample Compliance Plan (cont.)
• Free downloadable copies available for APPA and NRECA
• NRECA members contact Patti Metro at:
  – Patti Metro
    Manager, Transmission & Reliability Standards
    National Rural Electric Cooperative Association (NRECA)
    4301 Wilson Blvd., Mail Code EP11-253
    Arlington, VA 22203
    PH 703.907.5817
    FX 703.907.5517
    CELL 571.334.8890
• APPA members contact Nathan Mitchell
     Trade Associations as a Resource:
• Assist members by developing compliance manuals,
  conferences, webinars, and sharing of lessons learned
  between members. We need your feedback!
• Website with latest developments on standards and
  compliance issues:
• Advocate for members at the national level by
  providing consolidated comments on standards under
• Advocate at the regional level by requesting consistent
  enforcement of the standards.
          Contractors as a Resource

• APPA created a database of contractors with
  NERC expertise – available to all members
• Vendor Expos at various conferences
  – APPA Engineering and Operations Conference
    March 20-23, 2011
  – APPA National Conference June 19-22, 2011
• APPA Online Suppliers Guide
  Strategic Power
• Addresses the “brain drain” and public power’s (utility, JAA,
  state association) skill set deficiencies
   interim “intellectual capital matchmaker”
     •   matches individual with public power entity
     •   focuses on executive team positions
     •   targets existing positions (bridge employment) and new tasks (special
     •   provides “mentoring/training” of existing staff member
     •   includes retired and other industry experts seeking interim employment
   utilities can hire contract rather than full time staff
     •   circumvents hiring freezes, providing benefit packages and negotiating
         termination conditions
                    Nathan Mitchell P.E.
Director of Electric Reliability Standards and Compliance
           American Public Power Association
        1875 Connecticut Avenue NW Suite 1200
                  Washington DC 20009
                  Phone #202-467-2925

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