UNITED STATES OF AMERICA
BEFORE THE

FEDERAL ENERGY REGULATORY COMMISSION

North American Electric Reliability Corporation)Docket No. RC11-6-004

MOTION TO INTERVENE AND COMMENTS OF THE ISO/RTO COUNCIL

Pursuant to Rule 214 of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission (“FERC” or “Commission”), 18 C.F.R. § 214, the ISO-RTO Council (“IRC”) hereby moves to intervene and comments in the above-captioned proceeding.

On March 15, 2013 the North American Electric Reliability Corporation (“NERC”)
submitted a compliance filing and report (“NERC Petition”) in the above-referenced docket
related to the NERC Find, Fix and Track (“FFT”) enforcement mechanism.1 The NERC Petition
proposes certain enhancements to the FFT program. On March 20, 2013 the Commission
noticed the filing, establishing a comment date of April 15, 2013. The IRC hereby moves to
intervene and files comments in support of NERC’s proposed revisions to the FFT program.2

1 See North American Electric Reliability Corporation, “Petition Requesting Approval of New

Enforcement Mechanisms and Submittal of Initial Informational Filing Regarding NERC’s Efforts to Refocus
Implementation of its Compliance Monitoring and Enforcement Program,” Docket No. RC11-6-000 (“Initial FFT
Petition”). The Commission approved the original NERC FFT proposal in North American Electric Reliability
Corporation, “Order Accepting with Conditions the Electric Reliability Organization’s Petition Requesting
Approval of New Enforcement Mechanisms and Requiring Compliance Filing,” 138 FERC ¶ 61,193 at PP 75-76
(2012) (March 15 Order).

2 The IRC is comprised of the Alberta Electric System Operator, the California Independent System
Operator Corporation, the Electric Reliability Council of Texas, Inc. the Independent Electricity System Operator,
ISO New England, Inc., the Midwest Independent Transmission System Operator, Inc., the New York Independent
System Operator, Inc., PJM Interconnection, L.L.C. and the Southwest Power Pool, Inc. The Alberta Electric
System Operator is not FERC-jurisdictional and is not joining these comments. The Independent Electricity System
Operator is joining the comments, but is not subject to the Commission’s jurisdiction, and these comments do not
constitute agreement or acknowledgement that they can be subject to the Commission’s jurisdiction.

I.COMMENTS

The NERC Petition proposes five changes to the FFT Program. Specifically, NERC proposes the following modifications:

(a) The inclusion of FFTs presenting moderate risk;

(b) The inclusion of FFTs with mitigation completion timeframes in the near
future;

(d) The public posting of FFTs in lieu of monthly informational filings; and

(e) NERC sampling of FFTs and submission of an annual informational report.

All of the proposed revisions will enhance the effectiveness of the NERC Compliance
and Monitoring Enforcement Program (“CMEP”), specifically enforcement, by mitigating

unnecessary administrative and process obligations, thereby allowing the ERO and registered entities to focus resources on core reliability issues. Accordingly, the IRC respectfully recommends that the Commission approve all of the proposed program enhancements and authorize NERC to implement them as soon as practical.

With respect to expanding the scope of the FFT program to include moderate risk
matters, as noted in the NERC petition, the Commission initially denied consideration of such
matters for FFT processing, stating that until it could obtain “more experience on how the risk
determinations are made for the purpose of qualifying possible violations for FFT treatment, the
Commission will condition its acceptance of the FFT proposal on allowing only possible
violations that pose a minimal risk to Bulk-Power System reliability to be eligible for FFT

treatment.”3 The NERC Petition describes how the initial phase of the FFT program (i.e.
September 2011 - December 2012) has provided NERC and its Regional Entities with adequate
experience in risk assessment, as evidenced by the development of risk determination procedures
by each Regional Entity, and NERC’s oversight of the implementation of this aspect of the FFT
program during the initial FFT phase. The risk assessment processes give NERC and its
Regional Entities the necessary tools to determine that a moderate risk issue is suitable for FFT
treatment based on risk, as guided by the application of the objective metrics in those procedures
(e.g. internal controls that detect and correct the issue). The experience in performing risk
assessments during the initial FFT phase provides reasonable assurance that consideration of
moderate risk issues for FFT processing will accurately reflect the risk of the issue, and,
therefore, will result in appropriate enforcement processing decisions. Because these decisions
will be based on the application of objective criteria against the facts, this will provide NERC
and/or FERC with the ability to effectively review the decisions. Finally, as NERC notes,
expanding the scope of the FFT program in this manner does not mean all moderate risk issues
will be afforded FFT treatment. In fact, NERC explicitly states that is not the case.4
Accordingly, allowing moderate risk issues to be considered for FFT processing will not create
an undue risk to the bulk-power system. Rather, it will only enhance the efficiency benefits to be
gained from the FFT program.

The second proposed improvement to the FFT program would allow matters to be
processed as FFT issues if the mitigation activities will be completed in the near future - i.e. the
matter does not have to be completely mitigated to receive FFT treatment. This is reasonable
and reflects the reality associated with particular mitigation activities. As noted in the NERC

3 NERC Petition at 39-40.

4 Id at 37.

Petition, some mitigation measures may require a long lead time due to the nature of the activity
relative to the time it takes to process the underlying matter as an FFT issue. If that disconnect
does not create a risk to the BPS, as determined by the application of the relevant risk assessment
procedures and considerations, there is no reason to preclude FFT treatment for what is
otherwise an administrative timing requirement. Such a result would reflect a form-over-
substance outcome that is inconsistent with the goal of moving to a risk-based CMEP program
that more effectively supports reliability. Conversely, approving this aspect of the proposal will
facilitate the desired reliability and efficiency benefits by enabling NERC, its Regional Entities
and registered entities to process these lower risk issues expeditiously, thereby limiting the
resource impact so all relevant entities can focus on core reliability issues.

NERC also proposes to eliminate the requirement for senior officer certification of
mitigation activities. This is consistent with the goal of improving the efficiency of the FFT
process and reducing unnecessary administrative burdens. Although the Commission’s prior
reasoning for imposing this requirement may have conceptual merit, in practice it is not
necessary to achieve full mitigation of issues or to facilitate organizational commitment to
reliability issues. As noted in the NERC Petition, to receive FFT treatment one metric
considered is an entity’s compliance program. Effective compliance programs will necessarily
reflect organizational commitment to supporting electric reliability generally, as well as
dedicating appropriate resources and attention to compliance with the NERC reliability
standards. Consistent with these overarching goals and commitments, entities with such
programs will ensure mitigation activities are effectively implemented and completed. It is not
necessary to require senior officer certification to accomplish this. In fact, it will typically be
other individuals within the organization that are responsible for (and have knowledge of) the

mitigation activity and it is likely that these individuals will be in the best position to attest to completion of the activities. Alternatively, as noted in the petition, NERC and/or Regional Entity oversight of mitigation plans ensure completion of the relevant activities.

Consistent with the above comments, the senior officer certification provides marginal value at best. Arguably, it does nothing more than create an unnecessary administrative obligation that, on its own, does not enhance organizational commitment to reliability. Completion of mitigation activities should be verified, but the verification process should be flexible enough to allow entities to use certification processes that best suit the nature of the violation and their organizational structure, and/or allow the certification to occur via NERC/Regional Entity verification as part of their oversight activities.

NERC also proposes to implement a process that replaces monthly FFT informational
filings with the public posting of FFTs. Replacing the monthly filing with a posting requirement
that retains all the relevant information will increase the efficiency of the FFT program without
compromising the ability of NERC or the Commission to review each matter, because the basis
for review (the information associated with the FFT) would be the same, and, therefore, the
Commission would continue to have access to all relevant information. This change would
primarily benefit NERC and the Regional Entities by reducing the resources required to develop
and process the monthly FFT filings. However, it would also benefit registered entities by
facilitating NERC’s and its Regional Entities’ ability to efficiently and effectively process
enforcement matters, which would reduce the impact to the resources registered entities are
required to dedicate to these matters.

The final enhancement to the FFT program would align NERC’s review of the FFT
program with the Commission’s. Specifically, NERC proposes to review the program by

sampling FFTs posted by the Regional Entities during and outside of the relevant 60-day review
periods. On that basis it would submit an annual information report to the Commission. Like
other aspects of the proposal, this change will increase the efficiency and effectiveness of the
FFT program. Because of the experience gained to date, and the refinement of the FFT
processes used by the Regional Entities as a result of this experience during the initial FFT
phase, it is not necessary for NERC to review every FFT issue. The process has evolved to the
point that prospective oversight and review can be managed by the proposed sampling process.
This process, combined with future NERC efforts to enhance the FFT program, should be
adequate to identify areas for improvement and areas that may merit additional attention or
scrutiny by NERC and/or the Commission. By allowing NERC to implement its
oversight/review function based on sampling, as opposed to reviewing each and every issue
before it can be processed for completion, the Commission will free up significant resources to
focus on other matters that focus on core reliability issues, which will result in achieving greater
reliability benefits.

II.CONCLUSION

NERC’s risk based initiatives have the potential to improve the efficiency and
effectiveness of its functions. Accordingly, NERC and its Regional Entities should be
commended for their efforts in this regard, as should the Commission for its support of those
initiatives and goals. With respect to the FFT program, it has provided benefits to date. The
proposed enhancements at issue in this proceeding will provide incremental benefits that
facilitate the ability of all affected parties to focus more on core reliability issues, and less on
marginal matters, such as administrative issues, or even substantive issues that do not pose a
significant risk to reliability. Accordingly, the IRC supports the proposals in the NERC Petition

and requests that the Commission approves them and authorize NERC to implement as soon as practical.

In its petition, NERC also discusses specific improvements it intends to implement for the FFT program in the future, as well as its general intent to continue to review and improve the program. NERC also notes its intention to continue to evolve its risk based approach to compliance monitoring and enforcement. The IRC looks forward to working with NERC on future initiatives that enhance the FFT program, as well as on any other risk based compliance monitoring and enforcement initiatives.

Respectfully submitted,

/s/ Craig Glazer/s/ Raymond W. Hepper

Craig GlazerRaymond W. Hepper

Vice President - Federal Government PolicyVice President, General Counsel, and Secretary

Robert EckenrodTheodore J. Paradise

Senior CounselAssistant General Counsel, Operations &

PJM Interconnection, L.L.C.Planning

1200 G Street, N.W. Suite 600ISO New England Inc.

Washington, D.C. 20005One Sullivan Road

Holyoke, Massachusetts 01040

/s/Stephen G. Kozey/s/ Brian Rivard

Stephen G. KozeyBrian Rivard

Vice President, General Counsel, and SecretaryManager, Regulatory Affairs & Sector Policy

Midwest Independent Transmission SystemAnalysis

Operator, Inc.Independent Electricity System Operator

P.O. Box 4202655 Bay Street, Suite 410

Carmel, Indiana 46082-4202Toronto, Ontario

M5G 2K4

/s/ Anna McKenna/s/ Carl F. Patka

Nancy SaracinoCarl F. Patka

General CounselAssistant General Counsel

Anthony IvancovichRaymond Stalter

Deputy General CounselDirector, Regulatory Affairs

Anna A. McKennaNew York Independent System Operator,

Assistant General CounselInc.

California Independent System Operator10 Krey Blvd

CorporationRensselaer, New York 12144

250 Outcropping Way

Folsom, California 95630

/s/ Paul Suskie/s/ Matthew Morais

Paul SuskieMatthew Morais

Sr. VP Regulatory Policy & General CounselAssistant General Counsel

Southwest Power PoolElectric Reliability Council of Texas, Inc.

201 Worthen Drive7620 Metro Center Drive

Little Rock, AR 72223-4936Austin, Texas 78744

Date: April 15, 2013

CERTIFICATE OF SERVICE

I hereby certify that I have this day electronically served a copy of this document upon all parties listed on the official service list compiled by the Secretary in the above-captioned proceeding, in accordance with the requirements of Rule 2010 of the Commission’s rules of Practice and Procedure (18 C.F.R. § 385.2010).

Dated at Austin, Texas, this 15th Day of April, 2013.

/s/ Matthew Morais

Matthew Morais

Assistant General Counsel
ERCOT