DC hydro m - BCUC · 2012. 9. 19. · DC hydro m FOR GENERATIONS Janet Fraser Chief Regulatory...

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DC hydro m FOR GENERATIONS Janet Fraser Chief Regulatory Officer Phone: 604-623-4046 Fax: 6.04-623-4407 [email protected] September 19, 2012 Dokie General Partnership Toba Montrose General Partnership Attention: Brandon Woudzia Attention: Brandon Woudzia bwoudzia@alterrapower . ca [email protected] Attention: Paul Rapp Attention: Jay Sutton prapp@alterrapower . ca [email protected] Attention: Walter MacFarlane Attention: Tony Nott [email protected] tnott@alterrapower . ca Attention: Sophie Pilkington Attention: Stacie Crane spilkington@alterrapower . ca [email protected] TransCanada Energy Sales Ltd. Catalyst Paper Attention: Gordon Bartels; Ron Adam Attention: Carlo Dal Monte wecc_compliance@transcanada . com carlo . [email protected] Attention: Bob Lindstrom bob . [email protected] FortisBC Energy Inc. lnnergex Renewable Energy Inc. Attention: Janice Barkey (formerly Cloudworks Energy Inc.) [email protected] Attention: John D. Miller jmiller@innergex. com Attention: Jaime Chiang jaime. [email protected] Shell Energy North America Tembec CRS/LAP (Canada) Inc. and Shell Energy Attention: Alan Scalet North America (US), L.P alan . scalet@tembec . com Attention: Paul Kerr paul.kerr@shel l. com Attention: Chris Lague chris . lague@tembec. com Attention: Robert Reilley robert.reilley@shell . com Attention: Elroy Switlishoff elrovs@telus . net Dear Sir or Madam: RE: British Columbia Utilities Commission (BCUC) Powell River Energy Inc. Attention: Bryan Lacey Bryan . Lacey@brookfield renewable. com Attention: Tracy Brason Tracy.Brason@brookfieldrenewable. com Attention: Walter DiCesare Walter .DiCesare@brookfieldrenewable. com Attention: Andrew Burmaster Andrew. Bu rmaster@brookfieldrenewable. com Fortis BC Inc. Attention: Dennis Swanson Curtis Klashinsky; Lavern Humphrey [email protected] FortisBCMRSAEO@fortisbc. com Electricity.regulatory. affairs@fortisbc . com [email protected] Powerex Attention: Jeff Lam jeff.lam@powerex. com British Columbia Hydro and Power Authority (BC Hydro) Mandatory Reliability Standards (MRS) Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 As one of the entities who provided comments regarding the Mandatory Reliability Standards assessed in the above-noted report (Report), BC Hydro writes to advise you British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3 www.bchydro.com 543 Pages B-2

Transcript of DC hydro m - BCUC · 2012. 9. 19. · DC hydro m FOR GENERATIONS Janet Fraser Chief Regulatory...

  • DC hydro m FOR GENERATIONS Janet Fraser Chief Regulatory Officer Phone: 604-623-4046 Fax: 6.04-623-4407 [email protected]

    September 19, 2012

    Dokie General Partnership Toba Montrose General Partnership Attention: Brandon Woudzia Attention: Brandon Woudzia [email protected] [email protected]

    Attention: Paul Rapp Attention: Jay Sutton [email protected] [email protected]

    Attention: Walter MacFarlane Attention: Tony Nott [email protected] [email protected]

    Attention: Sophie Pilkington Attention: Stacie Crane [email protected] [email protected]

    TransCanada Energy Sales Ltd. Catalyst Paper Attention: Gordon Bartels; Ron Adam Attention: Carlo Dal Monte [email protected] [email protected]

    Attention: Bob Lindstrom [email protected]

    FortisBC Energy Inc. lnnergex Renewable Energy Inc. Attention: Janice Barkey (formerly Cloudworks Energy Inc.) [email protected] Attention: John D. Miller

    [email protected] Attention: Jaime Chiang [email protected]

    Shell Energy North America Tembec CRS/LAP (Canada) Inc. and Shell Energy Attention: Alan Scalet North America (US), L.P [email protected] Attention: Paul Kerr [email protected] Attention: Chris Lague

    [email protected] Attention: Robert Reilley robert.reilley@shell .com Attention: Elroy Switlishoff

    [email protected]

    Dear Sir or Madam:

    RE: British Columbia Utilities Commission (BCUC)

    Powell River Energy Inc. Attention: Bryan Lacey Bryan. Lacey@brookfield renewable. com

    Attention: Tracy Brason [email protected]

    Attention: Walter DiCesare [email protected]

    Attention: Andrew Burmaster Andrew. Bu rmaster@brookfieldrenewable. com

    Fortis BC Inc. Attention: Dennis Swanson

    Curtis Klashinsky; Lavern Humphrey

    [email protected] [email protected] [email protected] [email protected]

    Powerex Attention: Jeff Lam [email protected]

    British Columbia Hydro and Power Authority (BC Hydro) Mandatory Reliability Standards (MRS) Assessment Report No. 5 Compliance with BCUC Order No. R-54-12

    As one of the entities who provided comments regarding the Mandatory Reliability Standards assessed in the above-noted report (Report), BC Hydro writes to advise you

    British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3 www.bchydro.com

    543 Pages B-2

    markhudsBC HYDRO – MRS Report No 5

  • September 19, 2012 Mandatory Reliability Standards (MRS) Assessment Report No. 5 Compliance with BCUC Order No. R-54-12

    BChgdro

    Page 2 of 2

    that the Report was filed with the BCUC on April 19, 2012 and Errata No. 1 to the Report was filed on May 3, 2012. Electronic copies of the Report and Errata No. 1 were provided to you at the time the documents were filed. For convenience of review, the Report and Errata No. 1 are attached in electronic format to this letter (Attachment 1).

    Pursuant to Order No. R-54-12, the BCUC has established a regulatory process for review of the report and has directed BC Hydro to notify you of such. A copy of this order is attached for your information (Attachment 2). Please note that the date for submitting written comments to the BCUC and BC Hydro is October 19, 2012.

    For further information, please contact Sandra Jones at 604-623-4315 or by e-mail at [email protected].

    Yours sincerely,

    (for}Al_9A t Fraser LChief Regulatory Officer

    ch/ma

    Enclosures (2)

    Copy to: British Columbia Utilities Commission Attention: Erica Hamilton commission [email protected]

  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

    Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    BC Hydro MRS Assessment Report No. 5 April 19, 2012

    and Errata No. 1 – May 3, 2012

  • British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

    www.bchydro.com

    Janet Fraser

    Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected] May 3, 2012 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Sixth Floor – 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Gillis: RE: British Columbia Utilities Commission (BCUC)

    British Columbia Hydro and Power Authority (BC Hydro) Mandatory Reliability Standards (MRS) Assessment Report No. 5 Errata to Table 3

    BC Hydro is writing to the BCUC to provide a correction to its MRS Assessment Report No. 5 (Report) dated April 2012 that was submitted to the BCUC on April 19, 2012. In the attached revised report pages, BC Hydro has corrected and clarified entries that were made within Table 3 of the Report. These relate to BC Hydro’s final assessment of the adverse impacts and suitability of standards assessed in the Report. The corrections and clarification are in response to comments provided to BC Hydro, with copy to the BCUC, from Shell Energy North America (Canada) Inc./Shell Energy North America (U.S.) L.P. (together Shell Energy) by email on April 20, 2012 following the filing and distribution of the Report. Specifically, Shell is concerned that its comments regarding the suitability of certain requirements contained in standards EOP-005-3a, TOP-005-2a and VAR-001-2 were not fully addressed in the Report. Although BC Hydro had considered stakeholders’ perspectives, including Shell’s in reaching its final assessment of these and all the other standards included in the Report, the details provided in Table 3 were not clear in this regard which have led to the revisions noted above.

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

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    mailto:[email protected]:[email protected]

  • May 3, 2012 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Mandatory Reliability Standards (MRS) Assessment Report No. 5 Errata to Table 3 Page 2 of 2

    For further information, please contact Sandra Jones at 604-623-4315 or by e-mail at [email protected]. Yours sincerely,

    Janet Fraser Chief Regulatory Officer ch/ma Enclosure (1) Copy to:

    [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected] [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

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  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

    Page 1

    Mandatory Reliability Standards (MRS) Assessment Report No. 5 Errata No. 1 – May 3, 2012

    From the Original MRS Assessment Report No. 5 dated April 19, 2012:

    REMOVE INSERT

    Pages 20 to 22 Pages 20 to 22 Revision 1 – May 2, 2012

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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  • British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3

    www.bchydro.com

    Janet Fraser

    Chief Regulatory Officer Phone: 604-623-4046 Fax: 604-623-4407 [email protected] April 19, 2012 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Sixth Floor – 900 Howe Street Vancouver, BC V6Z 2N3 Dear Ms. Gillis: RE: British Columbia Utilities Commission (BCUC)

    British Columbia Hydro and Power Authority (BC Hydro) Mandatory Reliability Standards (MRS) Assessment Report No. 5

    BC Hydro is writing to the BCUC to provide its MRS Assessment Report No. 5 (Report) dated March 2012, pursuant to section 125.2(3) of the Utilities Commission Act (UCA). BC Hydro is providing an electronic copy of the Report to parties involved in consultation for the purpose of preparing the Report. Overview of Report The Report covers the reporting period of December 1, 2010 to November 30, 2011 and presents the reliability impacts, suitability, and potential costs of adopting three new reliability standards, seven replacement reliability standards and 21 revised reliability standards (three of which were revised twice during the reporting period), for the bulk electric system in British Columbia (B.C.). BC Hydro has included a proposed process for the BCUC’s adoption of the standards assessed in the Report. Appendix D of the Report includes a draft order and a table summary of the new, replacement and revised standards that would be in force in B.C. if the BCUC adopts all of the standards assessed in the Report. The draft order also includes BC Hydro’s recommendations for effective dates of the new, replacement and revised standards. Additional Comments BC Hydro would like to take this opportunity to comment on the adoption without prior assessment by BC Hydro of the following provisions:

    the NERC Glossary of Terms (August 4, 2011 version); and

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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    mailto:[email protected]:[email protected]

  • April 19, 2012 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Mandatory Reliability Standards (MRS) Assessment Report No. 5 Page 2 of 3

    the Compliance Provisions, as defined by the Rules of Procedure for Reliability Standards in British Columbia, that accompany each of the adopted British Columbia reliability standards.

    BC Hydro has not assessed the reliability impacts, suitability, and potential cost of these provisions, or made recommendations regarding their approval. Additional detail with respect to each circumstance is provided below. NERC Glossary of Terms BC Hydro assessed the April 20, 2010 version of the NERC Glossary of Terms in Assessment Report No. 3. The BCUC subsequently adopted the August 4, 2011 version of the Glossary (which had not been assessed by BC Hydro), in Order No. G-162-11 dated September 1, 2011. BC Hydro subsequently reviewed the August 4, 2011 version of the Glossary and determined that, in this particular case, there were likely no material impacts to BC Hydro or other MRS registered entities in B.C. related to its adoption. However, BC Hydro is of the view that changes in Glossary terms have the potential to materially impact reliability, suitability and potential cost aspects of adopted standards. In addition, adoption of certain definitions (e.g., the revised definition of the bulk electric system that has been proposed by NERC), could create seams issues in B.C. (e.g., if the exclusion provisions of the NERC rules of procedure are not also incorporated). BC Hydro therefore respectfully requests that only versions of the Glossary that have been included in the assessment reports be considered for adoption. Compliance Provisions The analytical approach taken to evaluate reliability standards has not changed from that used in previous MRS assessment reports. In those reports, it was determined that the compliance-related provisions included in the NERC and WECC reliability standards were not applicable to the meaning of “reliability standards” defined in section 125.2 of the UCA. As a result, BC Hydro has never assessed the compliance-related provisions that accompany the reliability standards that are assessed in the MRS assessment reports. Accordingly, a strike-through of Section D – Compliance – for each standard included in the Report has been performed. The BCUC has endorsed this analytical approach by separately adopting the Compliance Provisions, as defined by the Rules of Procedure for Reliability Standards in B.C., that accompany each of the adopted B.C. reliability standards. However, on the WECC website, there is no strike-through of Section D – Compliance – for each standard that is posted. BC Hydro is concerned that the absence of strike-through could lead to the erroneous impression that the Compliance Provisions have been assessed by BC Hydro, when they have not. BC Hydro respectfully requests that to avoid any confusion, the BCUC clarify that the Compliance Provisions have not been assessed by BC Hydro by directing WECC to either:

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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  • April 19, 2012 Ms. Alanna Gillis Acting Commission Secretary British Columbia Utilities Commission Mandatory Reliability Standards (MRS) Assessment Report No. 5 Page 3 of 3

    (1) retain the strike-through of the Compliance Provisions in respect of the standards that have been assessed and adopted in B.C.; or

    (2) include an explanation on the WECC website that the compliance-related provisions found in Section D – Compliance that accompany each standard have not been assessed by BC Hydro.

    For further information, please contact Sandra Jones at 604-623-4315 or by e-mail at [email protected]. Yours sincerely,

    Janet Fraser Chief Regulatory Officer ch/ma Enclosure (1) Copy to: [email protected]; [email protected]; [email protected];

    [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

    April 2012

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

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    Table of Contents

    1 Introduction ........................................................................................................ 1 1.1 Purpose of Report ..................................................................................... 1 1.2 Summary ................................................................................................... 2 1.3 Contents of the Report .............................................................................. 4 1.4 Proposed Process ..................................................................................... 5

    2 Standards Assessment Process used in the Report .......................................... 6 2.1 Identification of Standards for Review and Inclusion in MRS

    Assessment Report No. 5 ......................................................................... 6 2.2 Consultation .............................................................................................. 7

    3 Assessment of Individual Standards .................................................................. 9 3.1 Analytical Approach to Assessment of Reliability Impact, Suitability

    and Cost of Adoption ............................................................................... 10 3.1.1 Analytical Approach in Assessing Adverse Reliability

    Impacts ..................................................................................... 10 3.1.2 Analytical Approach for the Suitability Assessment .................. 11 3.1.3 Analytical Approach for the Cost Assessment .......................... 11

    3.2 Initial Screening of the Standards for Adverse Reliability Impacts and Suitability ................................................................................................. 12

    3.3 Summary of Final Assessment of the Standards Assessed in the Report ..................................................................................................... 19

    4 NERC Glossary of Terms and NERC Functional Model ................................... 22 5 Future Assessment Reports ............................................................................. 23 6 Conclusions ...................................................................................................... 24

    List of Tables

    Table 1 B.C. MRS Program Registered Entity List .......................................... 8 Table 2 Initial Screening for Adverse Reliability Impact and Suitability ......... 13 Table 3 Final Assessment Summary ............................................................. 20

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    List of Appendices

    Appendix A-1 List of Standards to be Assessed, FERC Approval and Effective Date Appendix A-2 NERC and WECC Standards Assessed by BC Hydro Appendix B NERC Glossary of Terms Used in Reliability Standards, Updated

    December 13, 2011 Appendix C Consultation Materials Appendix D Draft Order

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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    1 Introduction

    1.1 Purpose of Report

    Pursuant to the requirements of section 125.2(3) of the Utilities Commission Act (the

    UCA), British Columbia Hydro and Power Authority (BC Hydro) provides this

    Mandatory Reliability Standards (MRS) Assessment Report No. 5 (the Report) to the

    British Columbia Utilities Commission (BCUC) regarding the reliability impacts,

    suitability, and potential costs of adopting three new standards, seven replacement

    standards and 21 revised reliability standards, for the bulk electric system in British

    Columbia (B.C.).

    The three new reliability standards assessed in the Report are North American

    Electric Reliability Corporation (NERC) standards that relate to interconnection

    reliability operations and coordination.

    The seven replacement reliability standards assessed in the Report consist of one

    NERC standard, and six Western Electricity Coordinating Council (WECC)

    standards developed for the Western Interconnection. The seven replacement

    standards entirely supersede eight BCUC approved reliability standards adopted in

    B.C. by Order No. G-67-09. Specifically, one of the six WECC standards

    supersedes two BCUC approved standards; and the NERC replacement standard

    supersedes one BCUC approved standard in its entirety, and certain requirements

    of another BCUC approved standard, both on a staged basis.

    The 21 revised reliability standards, three of which have been revised twice during

    the Assessment Period, are revisions to 21 BCUC approved reliability standards

    adopted in B.C. by Orders No. G-67-09, G-167-10 and G-162-11. The final

    versions of the 21 revised standards assessed in the Report entirely supersede

    21 existing BCUC approved standards. The revisions contained in the interim

    versions of the three twice revised standards are entirely contained within the final

    versions of the standards. For these standards, BC Hydro has reviewed the overall

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    revision to the approved reliability standards and has not assessed the interim

    versions separately.

    All 31 standards assessed in the Report have been approved by the United States

    (U.S.) Federal Energy Regulatory Commission (FERC), and became enforceable in the

    U.S. during the period covered by this Report – December 1, 2010 to November 30,

    2011 (the Assessment Period).

    The Draft Order attached to the Report as Appendix D identifies the 31 standards that

    would be in force in B.C., should the BCUC adopt the three new standards,

    seven replacement standards, and final versions of the 21 revised standards assessed

    in the Report.

    The Draft Order also includes a table that lists: the three new standards; the seven

    replacement standards; the final versions of the 21 revised standards; the interim

    versions of the three twice-revised standards; and the 29 BCUC approved standards

    being superseded by the replacement or revised standards assessed in the Report. In

    addition, in order to provide registered entities sufficient time to adjust business

    processes to achieve and maintain compliance, the table includes recommended

    effective dates for each of the 31 standards assessed in the Report.

    NERC and WECC are continuously developing new and revised standards. Pursuant to

    section 125.2(3) of the UCA, BC Hydro has an ongoing obligation to report on NERC

    and WECC reliability standards once they are adopted by FERC and become

    enforceable in the U.S. As outlined in the previous MRS Assessment Reports, any

    NERC or WECC standard adopted by FERC and becoming enforceable in the U.S.

    within an annual assessment period of December 1 to November 30 of the following

    year will be reported on by BC Hydro in its annual MRS Assessment Report.

    1.2 Summary

    Using the same methodology that was employed in previous MRS Assessment Reports,

    BC Hydro has concluded that the standards assessed in the Report will preserve or

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

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    enhance the reliability of the bulk electric system in B.C., and thus are in the public

    interest and are suitable for adoption in B.C.

    BC Hydro has assessed its estimated incremental one-time and ongoing annual costs

    of achieving and maintaining compliance with the adoption of the 31 reliability standards

    assessed in the Report as mandatory in B.C.

    Consistent with the approach taken in previous MRS Assessment Reports, BC Hydro

    has sought input from B.C. MRS registered entities regarding their estimated

    incremental one-time and annual ongoing costs associated with achieving and

    maintaining compliance with the 31 standards assessed in the Report, provided that the

    registered entities were not otherwise subject to equivalent requirements by virtue of

    pre-existing reliability obligations.1

    A complete list of the registered entities with whom BC Hydro consulted is provided in

    Table 1, section 2.2 of the Report. A detailed breakdown of the estimated incremental

    one-time and ongoing costs reported by BC Hydro and the registered entities is

    provided in Table 3, section 3.3 of the Report. Registered entities’ responses are

    reproduced in full in Appendix C.

    On the basis of BC Hydro’s own assessment and the responses received from those

    registered entities providing cost estimates, BC Hydro estimates that the cumulative

    cost for B.C. registered entities to achieve and maintain compliance with the

    31 reliability standards assessed in the Report will be in the order of $1,634,000 with

    respect to one-time costs, and $95,000 in costs on an annual ongoing basis:

    BC Hydro reported estimated incremental one-time costs of $1,000 and minimal

    annual ongoing costs;

    1 BC Hydro has adopted the assumption used in previous MRS Assessment Reports; namely that costs associated

    with achieving compliance with requirements currently in place in B.C. ought to be excluded, as they are attributable to an existing compliance gap as opposed to adopting the NERC and WECC standards as mandatory in B.C.

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    Catalyst Paper Corporation (Catalyst) (Crofton, Elk Falls, Port Alberni, and Powell

    River Divisions) reported estimated incremental one-time costs of up to $1,060,000

    depending on the extent to which Critical Cyber Asset (CCA) reliability standards

    are applicable to Catalyst, and $70,000 annual ongoing costs;

    FortisBC reported estimated incremental one-time costs of $570,000 and $25,000

    annual ongoing costs; and

    Powell River Energy Inc. (PREI) reported estimated incremental one-time costs of

    $3,000 and $0 annual ongoing costs.

    While not insignificant, BC Hydro is of the view that these expenditures are necessary,

    given that the major portion of the costs incurred relate to identifying CCAs associated

    with the Critical Assets that support the reliable operation of the bulk electric system.

    BC Hydro recommends the adoption of the standards assessed in this report.

    1.3 Contents of the Report

    The Report is organized as follows:

    Section 2 explains BC Hydro’s standards assessment process, including its consultation

    with stakeholders.

    Section 3 summarizes BC Hydro’s analytical approach to assessing reliability standards

    and the results of that assessment in the case of the 31 standards considered.

    Section 4 describes how BC Hydro will proceed with the assessment of future reliability

    standards.

    The Appendices to the Report are as follows:

    Appendix A-1 List of Standards Assessed, FERC Approval and Effective Date

    Appendix A-2 NERC and WECC Standards Assessed by BC Hydro

    Appendix B NERC Glossary of Terms used in Reliability Standards, Updated

    December 13, 2011

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    Appendix C Consultation Materials

    Appendix D Draft Order

    1.4 Proposed Process

    This is the fifth MRS Assessment Report to be submitted to the BCUC. The BCUC is

    obligated by section 125.2(5) of the UCA to make the Report publicly available and to

    consider any comments it receives in respect of the Report.

    BC Hydro would shortly thereafter respond to any comments. The BCUC would then

    determine whether all the issues raised in the comment process had been dealt with to

    its satisfaction. If so, no further process would be required. If not, then a written process

    could be established to deal with any outstanding issues. Upon completion of the

    process, the BCUC would determine whether the standards assessed in the Report

    should be adopted in B.C.

    With respect to the approval for adoption in B.C. of the replacement standards and final

    versions of the revised standards, in order to avoid duplication BC Hydro suggests that

    the BCUC approved standards being superseded by replacement or revised standards

    be ordered to remain in effect until superseded on the recommended effective dates by

    the corresponding replacement standard or final version of the revised standard

    assessed in the Report.

    The following is suggested specifically with respect to the adoption of replacement

    standard PER-005-1 and revised standard PER-004-2:

    PER-005-1: BCUC approved standard PER-002-0, and BCUC approved standard

    PER-004-1 Requirements 2, 3 and 4, be ordered to remain in effect until

    superseded in stages by replacement standard PER-005-1.

    PER-004-2: BCUC approved standard PER-004-1 Requirements 1 and 5 be

    ordered to remain in effect until superseded by revised standard PER-004-2.

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    With respect to the three revised standards with interim versions, BC Hydro proposes

    that an appropriate process to follow in these circumstances would be for the BCUC to

    adopt and simultaneously order that the interim versions of these standards shall not

    become effective, being superseded by the final versions of these revised standards.

    This process is essentially the same as that which was followed for the eight

    twice-revised CIP standards covered by MRS Assessment Report No. 3.

    2 Standards Assessment Process used in the Report

    2.1 Identification of Standards for Review and Inclusion in MRS Assessment Report No. 5

    There is often a lapse in time between the date upon which a NERC or WECC standard

    is approved by FERC and the effective date upon which the standard becomes

    mandatory and enforceable under U.S. law. BC Hydro is required under the MRS

    Regulation to report on a reliability standard within one year of the date the reliability

    standard is “adopted by the regulatory body [i.e., FERC] with jurisdiction over the

    standard-making body that established the regulatory standard”. The approach that was

    taken in previous MRS Assessment Reports and will be used for this Report is to

    interpret “adopted” in the MRS Regulation as meaning those standards that are FERC

    approved, mandatory and enforceable under U.S. law during the Assessment Period.

    In this Report, BC Hydro is assessing a total of 31 reliability standards that became

    enforceable in the U.S. during the Assessment Period: three new standards, seven

    replacement standards, and 21 revised standards. With respect to the interim versions

    of the three twice revised standards, BC Hydro is recommending in the Draft Order

    (refer to Appendix D) that the interim versions be adopted but not become effective,

    being superseded by the final version of the standards (which are asterisked in

    Attachment A to Appendix D).

    A list of all of the standards assessed in the Report (including the interim versions of the

    three twice-revised standards) is provided in Appendix A-1, and includes a reference to

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    the FERC Order approving them, along with the date of the Order; and the effective

    date on which the standard became enforceable in the U.S.

    Appendix A-2 includes a summary of the NERC version history for the standards that

    are assessed in this Report, and for the interim versions of the three twice revised

    standards, as well as clean and black-lined copies of the new, replacement and revised

    standards. The black-lined copies of the three twice-revised standards include the

    changes contained in both the interim versions and final versions of these standards.

    For this Report, BC Hydro has designated the cut-off date for the Assessment Period as

    November 30, 2011. This cut-off is required to allow time for BC Hydro to assess the

    standards identified in the Report and consult with stakeholders regarding any impacts

    to them in achieving compliance with those standards. This same approach was used in

    previous MRS Assessment Reports.

    2.2 Consultation

    BC Hydro consulted with the registered entities listed below in Table 1. These

    registered entities include independent power producers (IPPs), industrial generators,

    transmission voltage customers, marketers and municipal distribution utilities, based on

    the BCUC registered entity list dated January 18, 2012.

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    Table 1 B.C. MRS Program Registered Entity List

    Bear Mountain Wind Limited Partnership Powerex Corp.

    British Columbia Hydro and Power Authority Prince George Pulp & Paper Mill

    Cariboo Pulp & Paper Company Rio Tinto Alcan

    Catalyst Paper ‐ Crofton Division Shell Energy North America (Canada) Inc.

    Catalyst Paper ‐ Elk Falls Division Shell Energy North America (US) L.P.

    Catalyst Paper ‐ Port Alberni Division Teck Metals Ltd

    Catalyst Paper ‐ Powell River Division Tembec CRS - Skookumchuk

    Cloudworks Energy Inc. Tembec LAP – Chetwynd

    Clowhom Power L.P. Terasen Gas Inc.

    Dokie General Partnership Dowland Industrial Works Ltd.

    Domtar Kamloops Toba Montrose General Partnership

    FortisBC Inc. Tolko Industries Limited

    FortisBC Energy Inc. TransAlta Energy Marketing Corp

    Intercontinental Pulp Mill TransCanada Energy Sales Ltd.

    Northwood Pulp Mill V.I. Power Limited Partnership

    Powell River Energy Inc. Zeballos Lake Hydro Limited Partnership

    Each registered entity on the list was sent a letter and a survey form on

    January 18, 2012 (refer to Appendix C). Entities were asked to complete and return the

    survey form to BC Hydro by February 10, 2012. The entities were asked to provide

    information for each standard as follows:

    (a) Develop and describe a list of incremental activities required to reach compliance.

    (b) For each incremental activity, assign incremental estimated costs and state the

    assumptions used in developing this estimate. Only consider the following costs:

    Activities where a one‐time capital cost will incur (e.g., for the purchase of new

    assets);

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    Activities where a one‐time cost will incur for external assistance (e.g.,

    consulting services) to reach compliance; and

    Activities where there are exceptional ongoing annual costs associated with

    compliance (e.g., compliance would require the hiring of additional staff or

    similar resources).

    (c) Include an assessment of the amount of time reasonably required to come into

    compliance with the standard once adopted by the BCUC.

    Including BC Hydro, a total of 32 registered entities were contacted, and 15 responses

    were received. Catalyst Paper Corporation’s Crofton, Elk Falls, Port Alberni, and Powell

    River Divisions provided a single consolidated survey response, as did Shell Energy

    North America (Canada) Inc. and Shell Energy North America (U.S.) LP. Powerex

    Corp.’s response has been consolidated with BC Hydro’s comments. Registered

    entities’ responses are attached in full in Appendix C.

    3 Assessment of Individual Standards

    As noted previously, the three new, seven replacement and 21 revised standards, are

    provided in Appendix A-2.2 BC Hydro has assessed these reliability standards against

    the criteria stipulated by legislation in B.C. (section 125.2(3) of the UCA).

    Section 3.1 summarizes BC Hydro’s approach to addressing these criteria. Section 3.2

    provides a description of each standard that is assessed and an explanation of the

    reliability and suitability issues along with BC Hydro’s conclusions. Section 3.3

    addresses the cost assessment and summarizes BC Hydro’s final assessment of all the

    standards considered in the Report.

    2 Appendix A-2 also includes the interim versions of the three twice-revised standards, which have not been

    separately assessed.

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    3.1 Analytical Approach to Assessment of Reliability Impact, Suitability and Cost of Adoption

    The analytical approach taken to evaluate reliability standards identified in the Report

    against the legislated assessment criteria has not changed from that used in previous

    MRS Assessment Reports. In those reports, it was determined that the

    compliance-related provisions included in the NERC and WECC reliability standards are

    not applicable to the meaning of “reliability standards” defined in section 125.2 of the

    UCA. As a result, BC Hydro did not assess the compliance-related provisions

    associated with the NERC reliability standards that are being assessed in the Report.

    Accordingly, a strike-through of Section D – Compliance – for each standard included in

    Appendix A-2 has been performed.

    In addition, BC Hydro is of the opinion that the effective dates stated in the standards

    included in the NERC and WECC reliability standards are likewise not applicable.

    Accordingly, a strike-through of Section A.5 – Effective Date – for each standard

    included in Appendix A-2 has been performed.

    3.1.1 Analytical Approach in Assessing Adverse Reliability Impacts

    BC Hydro has used the same approach in assessing adverse reliability impacts that

    was used in prior MRS Assessment Reports. This approach relies on a determination

    that those NERC and WECC standards that have either (i) performance requirements

    that are not currently employed in B.C., or (ii) requirements as stringent as, or more

    stringent, than requirements or practices currently employed in B.C. that will, by

    definition, have neutral or positive impacts on the reliability of the bulk electric system in

    B.C. Consequently, BC Hydro’s approach is to identify performance requirements

    associated with new, or revisions to, NERC and WECC reliability standards that are less

    stringent than the existing reliability standards already adopted in B.C., or practices

    otherwise mandated in utility tariffs or Business Practices approved or endorsed by the

    BCUC.

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    3.1.2 Analytical Approach for the Suitability Assessment

    The Report uses the same criteria to assess the suitability of new, replacement and

    revised reliability standards that were developed for the previous MRS Assessment

    Reports. The two criteria used for this analysis are set out below:

    (a) "Administrative suitability" means that the requirements in the standard are fit and

    appropriate for implementation in light of the policy and regulatory framework in

    B.C. The requirements can be implemented without requiring the ongoing

    involvement of NERC, the U.S. Government, or other extra‐jurisdictional entities in

    such a manner as would impair the operation and enforcement of the requirement

    in B.C. If one or more of the requirements in the standard incorporate by reference

    reliability standards not yet adopted in other jurisdictions, the remaining

    requirements in the standard can still be implemented presently in B.C. without

    giving effect to the particular requirement(s) containing the cross reference.

    (b) "Technical suitability" means that the requirements in the standard are fit and

    appropriate for implementation in B.C., taking into consideration the unique

    geographical, structural, design, and functional aspects of the B.C. bulk electric

    system and the assets that support the reliable operation of this system.

    3.1.3 Analytical Approach for the Cost Assessment

    BC Hydro’s approach to assess the potential costs of the new, replacement and revised

    reliability standards in the Report is consistent with the approach used to assess

    standards in previous MRS Assessment Reports. The objective is to provide an

    estimate of the costs of adopting NERC and WECC reliability standards in B.C.

    sufficient to inform the BCUC’s public interest assessment. Accordingly, only the costs

    that B.C. entities will potentially incur in order to achieve full compliance with the

    standards were assessed. Any costs associated with B.C. entities attaining compliance

    with pre-existing reliability requirements in B.C. were excluded.

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    3.2 Initial Screening of the Standards for Adverse Reliability Impacts and Suitability

    In terms of the assessment of the standards against the reliability and suitability criteria,

    BC Hydro first performed an initial screening of the three new standards, seven

    replacement standards, 21 revised standards, and the interim versions of the three

    twice-revised standards, against the criteria described in section 3.1 to identify issues

    for further examination. This initial screening does not purport to be BC Hydro’s

    eventual assessment of the new, replacement and revised standards.

    The results of BC Hydro’s initial screening of the standards for potential issues

    regarding adverse reliability impacts and suitability are summarized below in Table 2,

    which includes:

    the “Standard” column, which identifies all 31 standards assessed in the Report

    and the interim versions of the three twice-revised standards;

    the “Adverse Impact” column, which identifies potential issues relating to adverse

    reliability impact (of which there were none reported); and

    the “Changed from BCUC Approved Standard” column, which identifies potential

    suitability issues related to the replacement or revised standards superseding

    approved BCUC standards.

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    Table 2 Initial Screening for Adverse Reliability Impact and Suitability

    Standard Adverse Impact

    Suitability Issues

    Requires NERC Approval/ Participation

    Requires Provisions of Information to NERC or WECC

    Refers to Standard not yet FERC Approved

    Other Suitability Issues

    Changed from BCUC Approved

    Standard To NERC To WECC

    BAL-006-2 No No No No No No Yes

    CIP-001-1a 1 No No No No No No Yes

    CIP-001-2a No No No No No No Yes

    CIP-005-3a No No No No No No Yes

    EOP-002-3 No No No No No No Yes

    FAC-002-1 No No No No No No Yes

    FAC-501-WECC-1 No No No No No No Yes1

    INT-003-3 No No No No No No Yes

    IRO-002-2 No No No No No No Yes

    IRO-004-2 No No No No No No Yes

    IRO-005-2a 1 No No No No No No Yes

    IRO-005-3a No No No No No No Yes

    IRO-006-5 No No No No No No Yes

    IRO-006-WECC-1 No No No No No No Yes2

    IRO-008-1 No No No No No No No

    IRO-009-1 No No No No No No No

    IRO-010-1a No No No No No No No

    MOD-021-1 No No No No No No Yes

    PER-004-2 No No No No No No Yes

    PER-005-1 No No No No No No Yes3

    PRC-004-1a No No No No Yes4

    (PRC-003-1)

    No Yes

    PRC-005-1a No No No No No No Yes

    PRC-004-WECC-1 No No No No No No Yes2

    TOP-001-1a No No No No No No Yes

    TOP-002-2b No No No No No No Yes

    TOP-003-1 No No No No No No Yes

    TOP-005-1.1a 1 No No No No Yes4 No Yes

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    Standard Adverse Impact

    Suitability Issues

    Requires NERC Approval/ Participation

    Requires Provisions of Information to NERC or WECC

    Refers to Standard not yet FERC Approved

    Other Suitability Issues

    Changed from BCUC Approved

    Standard To NERC To WECC

    (PRC-012-0)

    TOP-005-2a No No No No Yes4

    (PRC-012-0) No

    Yes

    TOP-006-2 No No No No No No Yes

    TOP-007-WECC-1 No No No No No No Yes2

    TPL-002-0b No No No No No No Yes

    VAR-001-2 No No No No No No Yes

    VAR-002-WECC-1 No No No No No No Yes2

    VAR-501-WECC-1 No No No No No No Yes2

    1. Indicates an interim version. 2. Indicates a replacement standard. 3. Standard PER-005-1 supersedes BCUC Approved Standard PER-002-0 in its entirety and Requirements 2, 3

    and 4 of BCUC Approved Standard PER-004-1. 4. Individual Requirements within standards that incorporate by reference standards, that have not been assessed

    by BC Hydro and adopted by the BCUC, should be of no force or effect.

    Described in more detail below are the new, replacement and revised standards

    assessed in the Report.

    New Standards:

    The new Standard IRO-008-1 - Reliability Coordinator Operational Analyses and

    Real-time Assessments - deals with the prevention of instability, uncontrolled

    separation, or cascading outages that adversely impact the reliability of the

    interconnection by ensuring that the bulk electric system is assessed during the

    operations horizon.

    The new Standard IRO-009-1 - Reliability Coordinator Actions to Operate Within

    Interconnection Reliability Operating Limits (IROL) - deals with the prevention of

    instability, uncontrolled separation, or cascading outages that adversely impact the

    reliability of the interconnection by ensuring prompt action to prevent or mitigate

    instances of exceeding interconnection reliability operating limits.

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    The new Standard IRO-010-1a - Reliability Coordinator Data Specification and

    Collection - deals with the prevention of instability, uncontrolled separation, or

    cascading outages that adversely impact the reliability of the interconnection by

    ensuring the reliability coordinator has the data it needs to monitor and assess the

    operation of its reliability coordinator area.

    Replacement Standards:

    The replacement standard PER-005-1 - System Personnel Training - deals with

    ensuring that System Operators performing real-time, reliability-related tasks on

    the North American bulk electric system are competent to perform those reliability-

    related tasks. It supersedes, on a staged basis, Requirements 2, 3 and 4 of BCUC

    approved standard PER-004-1 (which deals with Reliability Coordination Staffing)3;

    and BCUC approved standard PER-002-0 (which deals with Operating Personnel

    Credentials) in its entirety, as follows:

    PER-005-1 Requirements 1 and 2 supersede:

    PER-004-1 Requirements 3 and 4; and

    PER-002-0 Requirements 1, 2 and 3.

    PER-005-1 Requirement 3 supersedes:

    PER-004-1 Requirement 2; and

    PER-002-0 Requirement 4

    The replacement standard FAC-501-WECC-1 - Transmission Maintenance -

    supersedes BCUC approved standard PRC-STD-005-1 and deals with

    maintenance and inspection planning and documentation for major WECC transfer

    paths in the bulk electric system.

    The replacement standard IRO-006-WECC-1 - Qualified Transfer Path

    Unscheduled Flow (USF) Relief - supersedes BCUC approved standard IRO-STD-

    3 PER-004-1 Requirements 1 and 5 are superseded by PER-004-2.

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    006-0 and deals with the mitigation of transmission overloads due to unscheduled

    line flow on qualified transfer paths.

    The replacement standard PRC-004-WECC-1 - Protection System and Remedial

    Action Scheme Misoperation - supersedes two BCUC approved standards –

    PRC-STD-001-1 and PRC-STD-003-1 – and deals with the analysis and mitigation

    of misoperations and remedial action schemes for transmission and generation

    protection systems.

    The replacement standard TOP-007-WECC-1 - System Operating Limits -

    supersedes BCUC approved standard TOP-STD-007-0 and deals with time limits

    for when actual flows on Major WECC transfer paths exceed system operating

    limits.

    The replacement standard VAR-002-WECC-1 - Automatic Voltage Regulators

    (AVR) - supersedes BCUC approved standard VAR-STD-002a-1 and deals with

    ensuring that automatic voltage regulators on synchronous generators and

    condensers are kept in service and controlling voltage.

    The replacement standard VAR-501-WECC-1 - Power System Stabilizer (PSS) -

    supersedes BCUC approved standard VAR-STD-002b-1 and deals with ensuring

    that power system stabilizers on synchronous generators are kept in service.

    Revised Standards

    The revised standard BAL-006-2 supersedes BCUC approved standard

    BAL-006-1.1 and deals with Inadvertent Interchange.

    The revised standard CIP-001-2a supersedes BCUC approved standard

    CIP-001-1, dealing with Sabotage Reporting. Revisions contained in CIP-001-1a,

    the interim version of this standard are included in the assessment of CIP-001-2a.

    The revised standard CIP-005-3a supersedes BCUC approved standard CIP-005-3

    and deals with Cyber Security — Electronic Security Perimeter(s).

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    The revised standard EOP-002-3 supersedes BCUC approved standard

    EOP-002-2.1 and deals with Capacity and Energy Emergencies.

    The revised standard FAC-002-1 supersedes BCUC approved standard

    FAC-002-0 and deals with Coordination of Plans for New Generation,

    Transmission, and End-User.

    The revised standard INT-003-3 supersedes BCUC approved standard INT-003-2

    and deals with Interchange Transaction Implementation.

    The revised standard IRO-002-2 supersedes BCUC approved standard IRO-002-1

    and deals with Reliability Coordination — Facilities.

    The revised standard IRO-004-2 supersedes BCUC approved standard IRO-004-1

    and deals with Reliability Coordination — Operations Planning.

    The revised standard IRO-005-3a supersedes BCUC approved standard

    IRO-005-2, dealing with Reliability Coordination — Current Day Operations.

    Revisions contained in IRO-005-2a, the interim version of this standard are

    included in the assessment of IRO-005-3a.

    The revised standard IRO-006-5 supersedes BCUC approved standard

    IRO-006-4.1 and deals with Reliability Coordination — Transmission Loading

    Relief (TLR).

    The revised standard MOD-021-1 supersedes BCUC approved standard

    MOD-021-0.1 and deals with Documentation of the Accounting Methodology for

    the Effects of Demand-Side Management in Demand and Energy Forecasts.

    The revised standard PER-004-2 supersedes BCUC approved standard

    PER-004-1 Requirements 1 and 5, and deals with Reliability Coordination —

    Staffing.4

    4 PER-004-1 Requirements 2, 3 and 4 are superseded by PER-005-1.

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    The revised standard PRC-004-1a supersedes BCUC approved standard

    PRC-004-1 and deals with Analysis and Mitigation of Transmission and Generation

    Protection System Misoperations.

    The revised standard PRC-005-1a supersedes BCUC approved standard

    PRC-005-1 and deals with Transmission and Generation Protection System

    Maintenance and Testing.

    The revised standard TOP-001-1a supersedes BCUC approved standard

    TOP-001-1 and deals with Reliability Responsibilities and Authorities.

    The revised standard TOP-002-2b supersedes BCUC approved standard

    TOP-002-2a and deals with Normal Operations Planning.

    The revised standard TOP-003-1 supersedes BCUC approved standard

    TOP-003-0 and deals with Planned Outage Coordination.

    The revised standard TOP-005-2a supersedes BCUC approved standard

    TOP-005-1.1, dealing with Operational Reliability Information. Revisions contained

    in TOP-005-1.1a, the interim version of this standard are included in the

    assessment of TOP-005-2a.

    The revised standard TOP-006-2 supersedes BCUC approved standard

    TOP-006-1 and deals with Monitoring System Conditions.

    The revised standard TPL-002-0b supersedes BCUC approved standard

    TPL-002-0a and deals with System Performance Following Loss of a Single Bulk

    Electric System Element (Category B).

    The revised standard VAR-001-2 supersedes BCUC approved standard

    VAR-001-1 and deals with Voltage and Reactive Control.

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    3.3 Summary of Final Assessment of the Standards Assessed in the Report

    BC Hydro’s final assessment of the 31 standards assessed in the Report, based on

    internal and external B.C. responses from registered entities, is summarized below in

    Table 3, which includes:

    BC Hydro’s final assessment as to whether the adoption of the 31 standards

    assessed in the Report will give rise to adverse reliability consequences;

    BC Hydro’s final assessment as to the suitability of the 31 standards assessed in

    the Report, based on the criteria described in section 3.1.2;

    BC Hydro’s and registered entities’ estimated incremental one-time and ongoing

    annual costs to achieve and maintain compliance associated with the 31 standards

    assessed in the Report; and

    BC Hydro’s recommended effective dates, based on comments made by

    registered entities who responded to the stakeholder survey, for the 31 standards

    assessed in the Report. BC Hydro recommends that these recommended effective

    dates be adopted by the BCUC to replace Section A.5-Effective Date in each of the

    standards listed in Table 3.

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    Table 3 Final Assessment Summary

    Standard Adverse Impact

    Suitability Issues

    One-time Cost ($)

    Ongoing Cost ($/year)

    Recommended Effective Date

    BAL-006-2 No None reported

    No None reported

    None reported None reported

    3 months after BCUC approval

    CIP-001-2a * 1 No None reported

    No None reported

    None reported None reported Immediately after BCUC approval.

    CIP-005-3a No None reported

    No None reported

    Catalyst Paper - $1,000,000 to implement an Electronic Security Perimeter (ESP) if CCAs are identified.

    Catalyst Paper - $50,000 to implement an ESP if CCAs are identified.

    6 months after BCUC approval

    EOP-002-3 No None reported

    No None reported

    None reported None reported 6 months after BCUC approval

    FAC-002-1 No None reported

    No None reported

    Catalyst Paper - $50,000 dependent on confirmation that the interconnection has been evaluated against TPL-002-0 and TPL-003-0 will need to be sought from Transmission Planner (BC Hydro).

    None reported

    6 months after BCUC

    approval

    FAC-501-WECC-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    INT-003-3 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-002-2 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-004-2 No None reported

    No None reported

    None reported None reported 3 months after BCUC

    approval

    IRO-005-3a *1 No None reported

    No2 None reported.

    None reported. None reported. 3 months after BCUC approval

    IRO-006-5 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-006-WECC-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-008-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-009-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    IRO-010-1a No None reported

    No None reported

    BC Hydro -

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    Standard Adverse Impact

    Suitability Issues

    One-time Cost ($)

    Ongoing Cost ($/year)

    Recommended Effective Date

    MOD-021-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    PER-004-2 No None reported

    No None reported

    None reported None reported Immediately after BCUC approval.

    PER-005-1 No None reported

    No None reported

    FortisBC - $170,000

    FortisBC - $15,000

    Catalyst Paper – $20,000. Would need to audit BC Hydro procedures as Catalyst does not "operate" transmission assets nor does it have "System Operators"

    R1, R2 - 24 months after BCUC approval.

    R3 - 18 months after BCUC approval.

    R3.1 - 36 months after BCUC approval.

    PRC-004-1a No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    PRC-005-1a No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    PRC-004-WECC-1 No None reported

    No None reported

    None reported None reported 6 months after BCUC approval.

    TOP-001-1a No None reported

    No None reported

    None reported None reported Immediately after BCUC approval

    TOP-002-2b No None reported

    No None reported

    None reported None reported Immediately after BCUC approval

    TOP-003-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    TOP-005-2a * 1 No None reported

    No3 None reported

    None reported None reported 3 months after BCUC approval

    TOP-006-2 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    TOP-007-WECC-1 No None reported

    No None reported

    None reported None reported 3 months after BCUC approval

    TPL-002-0b No None reported

    No None reported

    None reported None reported Immediately after BCUC approval

    VAR-001-2 No None reported

    No4 None reported

    None reported None reported 6 months after

    BCUC approval

    VAR-002-WECC-1

    No None reported

    No None reported

    FortisBC - $400,000 in conjunction with VAR-501-WECC-1 due to Requirement 2

    FortisBC - $10,000 in conjunction with VAR-501-WECC-1 due to Requirement 2

    12 months after BCUC approval

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    Standard Adverse Impact

    Suitability Issues

    One-time Cost ($)

    Ongoing Cost ($/year)

    Recommended Effective Date

    VAR-501-WECC-1 No None reported

    No None reported

    FortisBC - $400,000 in conjunction with VAR-002-WECC-1 due to Requirement 2

    FortisBC - $10,000 in conjunction with VAR-002-WECC-1 due to Requirement 2

    3 months after BCUC approval

    * Indicates final version of twice-revised standard. 1. Indicates final version of twice revised standard. 2. Shell Energy North America (Canada) Inc./Shell Energy North America (U.S.) L.P. (together Shell Energy) raised

    suitability concerns (refer to Appendix C – Attachment C4-7 at page 2) however BC Hydro concluded that standard IRO-005-3a is suitable for adoption in B.C.

    3. Shell Energy raised suitability concerns (refer to Appendix C – Attachment C4-7 at page 5) however BC Hydro concluded that standard TOP-005-2a is suitable for adoption in B.C.

    4. Shell Energy raised suitability concerns (refer to Appendix C – Attachment C4-7 at page 5) however BC Hydro concluded that standard VAR-001-2 is suitable for adoption in B.C.

    BC Hydro’s assessment is that all of the new, replacement and revised standards will either

    maintain or promote the reliability of the bulk electric system in B.C.

    The total cost required to adopt these reliability standards in B.C. is estimated to be $1,634,000

    for their implementation, with ongoing annual costs of $95,000 to maintain compliance (both

    cumulative). The cost estimates are those of the stakeholders and BC Hydro and are presented

    in the Report without comment.

    4 NERC Glossary of Terms and NERC Functional Model Past practice has been for the BCUC to adopt the NERC Glossary of Terms Used in Reliability

    Standards (the NERC Glossary of Terms) in conjunction with reliability standards.

    The April 20, 2010 version of the NERC Glossary of Terms was attached as Appendix B to MRS

    Assessment Report No. 3, and as Appendix B to MRS Assessment Report No. 4. However, the

    BCUC adopted the August 4, 2011 version of the Glossary of Terms by

    BCUC Order No. G-162-11.

    The three new standards, seven replacement standards and the final versions of the 21 revised

    standards have been assessed by BC Hydro based on definitions contained in the the NERC

    Glossary of Terms dated December 13, 2011. Consequently, the BCUC approved NERC

    Glossary of Terms is out of date. BC Hydro is attaching the NERC Glossary of Terms dated as of

    December 13, 2011, to this Report as Appendix B. As identified within the document, the

    December 13, 2011 version of the NERC Glossary of Terms contains seventeen definitions that

    have been adopted by NERC but have not been approved by FERC and hence are not effective

    in the U.S.,

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 31 of 534

  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

    April 2012

    Page 23

    and should not become effective in B.C., and six definitions that have been remanded

    or retired.

    The updated December 13, 2011 version of the NERC Glossary of Terms is integral to

    the reliability standards, and should be adopted by the BCUC in conjunction with the

    standards assessed in this Report in order to achieve and maintain consistency with

    NERC standards going forward. Any definitions in the NERC Glossary of Terms that are

    not approved by FERC should not become effective in B.C.

    5 Future Assessment Reports

    Consistent with the procedure adopted in prior MRS Assessment Reports, once new

    reliability standards have been approved by FERC and become enforceable in the U.S.

    (such that the standards are applicable in the Western Interconnection), BC Hydro will

    conduct its assessment of those reliability standards as required by legislation. For

    efficiency’s sake, BC Hydro will endeavour to batch standards for periodic assessment

    reports, rather than submit a separate assessment report with the BCUC on each

    standard as it is adopted in other jurisdictions. Should BC Hydro or the BCUC determine

    that a particular standard is sufficiently critical to reliability that it warrants immediate

    implementation, BC Hydro will file a standard-specific assessment report and not wait

    until its next “batch” assessment report, as was the case for the standards assessed in

    MRS Assessment Report No. 4 which supported BC Hydro’s application to amend

    Attachment C of its Open Access Transmission Tariff.

    Any updates or revisions to the NERC Glossary of Terms will be reported on in future

    assessment reports. Specifically, the February 8, 2012 was issued after BC Hydro

    consulted on the Report. This revision and any subsequent revisions to the NERC

    Glossary of Terms will be reviewed in future MRS Assessment Reports as appropriate.

    The February 8, 2012 version contains a revision to the term Protection System, and

    the definition of Bulk Electric System is expected to be revised in a future version.

    These revisions may have material impacts on the suitability, and potential costs of

    adopting reliability standards in B.C.

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 32 of 534

  • Mandatory Reliability Standards (MRS) Assessment Report No. 5

    April 2012

    Page 24

    6 Conclusions

    BC Hydro has assessed three new standards, seven replacement standards and final

    versions of 21 revised standards, inclusive of interim versions where applicable, that

    were developed by NERC and WECC and became effective in the U.S. during the

    Assessment Period. BC Hydro has concluded that the standards assessed in the

    Report will preserve or enhance the reliability of the bulk electric system in B.C., and

    thus will serve the public interest and are suitable for adoption in B.C. based on the

    criteria applied in the assessment of these standards. BC Hydro recommends that the

    standards that have been assessed in the Report be adopted by the BCUC.

    BC Hydro recommends that the three new standards, seven replacement standards and

    the final versions of the 21 revised standards should have effective dates that are based

    on the recommended effective dates included in Table 3, section 3.3.

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 33 of 534

  • Mandatory Reliability Standards Assessment Report No. 5

    Appendix

    A-1

    List of Standards Assessed, FERC Approval and Effective Date

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 34 of 534

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    MRS Assessment Report No. 5 Appendix A-1

    Page 1 of 4

    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 35 of 534

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    MRS Assessment Report No. 5 Appendix A-1

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    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

    Page 36 of 534

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    MRS Assessment Report No. 5 Appendix A-1

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    MRS Assessment Report No. 5 Compliance with BCUC Order No. R-54-12 Directive 5

    Attachment 1

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