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116-390 Village Blvd. Princeton, NJ 08540 609.452.8060 | www.nerc.com

January 31, 2011 Ms. Kimberly Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426 Re: NERC Abbreviated Notice of Penalty regarding Scurry County Wind LP, FERC

Docket No. NP11-__-000 Dear Ms. Bose: The North American Electric Reliability Corporation (NERC) hereby provides this Abbreviated Notice of Penalty (NOP) regarding Scurry County Wind LP (SCW), with information and details regarding the nature and resolution of the violation1 discussed in detail in the Settlement Agreement (Attachment a) and the Disposition Document attached thereto, in accordance with the Federal Energy Regulatory Commission’s (Commission or FERC) rules, regulations and orders, as well as NERC Rules of Procedure including Appendix 4C (NERC Compliance Monitoring and Enforcement Program (CMEP)).2

This NOP is being filed with the Commission because Texas Reliability Entity (Texas RE) and SCW have entered into a Settlement Agreement to resolve all outstanding issues arising from Texas RE’s determination and findings of the enforceable violation of CIP-001-1 Requirement (R) 4. According to the Settlement Agreement, SCW admits the facts set forth and agreed to by the parties for purposes of the Settlement Agreement constitute violations of CIP-001-1 R4, and has agreed to the assessed penalty of three thousand dollars ($3,000), in addition to other remedies and actions to mitigate the instant violation and facilitate future compliance under the terms and conditions of the Settlement Agreement. Accordingly, the violation identified as

1 For purposes of this document, each violation at issue is described as a “violation,” regardless of its procedural posture and whether it was a possible, alleged or confirmed violation. 2 Rules Concerning Certification of the Electric Reliability Organization; and Procedures for the Establishment, Approval, and Enforcement of Electric Reliability Standards (Order No. 672), III FERC Stats. & Regs. ¶ 31,204 (2006); Notice of New Docket Prefix “NP” for Notices of Penalty Filed by the North American Electric Reliability Corporation, Docket No. RM05-30-000 (February 7, 2008). See also 18 C.F.R. Part 39 (2010). Mandatory Reliability Standards for the Bulk-Power System, FERC Stats. & Regs. ¶ 31,242 (2007) (Order No. 693), reh’g denied, 120 FERC ¶ 61,053 (2007) (Order No. 693-A). See 18 C.F.R § 39.7(c)(2).

NERC Notice of Penalty Scurry County Wind LP January 31, 2011

NERC Violation Tracking Identification Numbers TRE200900071 is being filed in accordance with the NERC Rules of Procedure and the CMEP. Statement of Findings Underlying the Violation This NOP incorporates the findings and justifications set forth in the Settlement Agreement executed on January 5, 2011, by and between Texas RE and SCW. The details of the findings and the basis for the penalty are set forth in the Disposition Document. This NOP filing contains the basis for approval of the Settlement Agreement by the NERC Board of Trustees Compliance Committee (NERC BOTCC). In accordance with Section 39.7 of the Commission’s regulations, 18 C.F.R. § 39.7, NERC provides the following summary table identifying each violation of a Reliability Standard resolved by the Settlement Agreement, as discussed in greater detail below.

NOC ID NERC

Violation ID

Reliability Std.

Req. (R) VRF Duration

Total Penalty

($)

NOC-685 TRE200900071 CIP-001-1 4 Medium 7/11/07 – 7/30/08 3,000

The text of the Reliability Standard at issue and further information on the subject violations are set forth in the Disposition Document. CIP-001-1 R4 - OVERVIEW During an off-site compliance audit of SCW on April 16, 2009, Texas RE discovered a violation of CIP-001-1 R4. Texas RE determined that SCW, as a Generation Operator, did not include an FBI contact in its sabotage reporting procedure until July 31, 2008. Statement Describing the Assessed Penalty, Sanction or Enforcement Action Imposed3

Basis for Determination Taking into consideration the Commission’s direction in Order No. 693, the NERC Sanction Guidelines, the Commission’s July 3, 2008, October 26, 2009 and August 27, 2010 Guidance Orders,4

the NERC BOTCC reviewed the Settlement Agreement and supporting documentation on December 10, 2010. The NERC BOTCC approved the Settlement Agreement, including Texas RE’s assessment of a three thousand dollar ($3,000) financial penalty against SCW and other actions to facilitate future compliance required under the terms and conditions of the Settlement Agreement. In approving the Settlement Agreement, the NERC BOTCC reviewed the applicable requirements of the Commission-approved Reliability Standards and the underlying facts and circumstances of the violation at issue.

3 See 18 C.F.R. § 39.7(d)(4). 4 North American Electric Reliability Corporation, “Guidance Order on Reliability Notices of Penalty,” 124 FERC ¶ 61,015 (2008); North American Electric Reliability Corporation, “Further Guidance Order on Reliability Notices of Penalty,” 129 FERC ¶ 61,069 (2009); North American Electric Reliability Corporation, “Notice of No Further Review and Guidance Order,” 132 FERC ¶ 61,182 (2010).


In reaching this determination, the NERC BOTCC considered the following factors:5

1. the violation constituted SCW’s first occurrence of violation of the subject NERC Reliability Standards;

6

2. Texas RE reported that SCW was cooperative throughout the compliance enforcement process;

3. there was no evidence of any attempt to conceal a violation nor evidence of intent to do so;

4. Texas RE determined that the violation did not pose a serious or substantial risk to the reliability of the bulk power system (BPS), as discussed in the Disposition Document; and

5. Texas RE reported that there were no other mitigating or aggravating factors or extenuating circumstances that would affect the assessed penalty.

For the foregoing reasons, the NERC BOTCC approves the Settlement Agreement and believes that the assessed penalty of three thousand dollars ($3,000) is appropriate for the violation and circumstances at issue, and is consistent with NERC’s goal to promote and ensure reliability of the BPS. Pursuant to 18 C.F.R. § 39.7(e), the penalty will be effective upon expiration of the 30 day period following the filing of this NOP with FERC, or, if FERC decides to review the penalty, upon final determination by FERC.

5 While Texas RE did review SCW’s compliance program, the compliance program was not considered a mitigating factor in determining the settlement amount. 6 Texas RE did not consider a prior violation of CIP-001-1 R4 by Hardee Power Partners Limited, also owned and operated by Invenergy, to be an aggravating factor as discussed in the Disposition Document. Violations of other plants owned and operated by Invenergy, which were not considered the same or similar to the instant violation, are identified and addressed in the Disposition Document.


Attachments to be included as Part of this Notice of Penalty The attachments to be included as part of this NOP are the following documents:

a) Settlement Agreement by and between Texas RE and SCW executed January 5, 2011, included as Attachment a;

i. Disposition Document for CIP-001-1 R4, included as Addendum A to the Settlement Agreement;

b) Texas RE’s Public Compliance Audit Report for CIP-001-1 R4 dated June 12, 2009, included as Attachment b;

c) SCW’s Mitigation Plan MIT-09-1875 for CIP-001-1 R4 dated June 24, 2009 and submitted August 10, 2009, included as Attachment c;

d) SCW’s Certification of Mitigation Plan Completion for CIP-001-1 R4 dated August 4, 2009 and submitted August 10, 2009, included as Attachment d; and

e) Texas RE’s Verification of Mitigation Plan Completion for CIP-001-1 R4 dated March 31, 2010, included as Attachment e.

A Form of Notice Suitable for Publication7

A copy of a notice suitable for publication is included in Attachment f.

7 See 18 C.F.R. § 39.7(d)(6).


Notices and Communications Notices and communications with respect to this filing may be addressed to the following:

Gerald W. Cauley President and Chief Executive Officer David N. Cook* Sr. Vice President and General Counsel North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, NJ 08540-5721 (609) 452-8060 (609) 452-9550 – facsimile [email protected] Susan Vincent* General Counsel Texas Reliability Entity 2700 Via Fortuna Suite 225 Austin, TX 78746 (512) 583-4922 [email protected] Mr. Alex George* Vice President Scurry County Wind LP One South Wacker Drive Suite 1900 Chicago, IL 60606 [email protected] *Persons to be included on the Commission’s service list are indicated with an asterisk. NERC requests waiver of the Commission’s rules and regulations to permit the inclusion of more than two people on the service list.

Rebecca J. Michael* Assistant General Counsel North American Electric Reliability Corporation 1120 G St. N.W. Suite 990 Washington, DC 20005-3801 (202) 393-3998 (202) 393-3955 – facsimile [email protected] Rashida Caraway* Manager, Compliance Enforcement Texas Reliability Entity 2700 Via Fortuna Suite 225 Austin, TX 78746 (512) 583-4977 [email protected]


Conclusion Accordingly, NERC respectfully requests that the Commission accept this Abbreviated NOP as compliant with its rules, regulations and orders.

Respectfully submitted, /s/ Rebecca J. Michael Gerald W. Cauley President and Chief Executive Officer David N. Cook Sr. Vice President and General Counsel North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, NJ 08540-5721 (609) 452-8060 (609) 452-9550 – facsimile [email protected]

Rebecca J. Michael Assistant General Counsel North American Electric Reliability

Corporation 1120 G St. N.W. Suite 990 Washington, DC 20005-3801 (202) 393-3998 (202) 393-3955 – facsimile [email protected]

cc: Scurry County Wind LP Texas Reliability Entity Attachments

Attachment a

Settlement Agreement by and between Texas RE and SCW executed January 5, 2011

For Public Release - January 31, 2011

Disposition Document for CIP-001-1 R4

OF 8 Texas RE CONFIDENTIAL

DISPOSITION OF VIOLATION1

NERC TRACKING NO. NOC# TRE200900071

685

REGISTERED ENTITY NERC REGISTRY ID. Scurry County Wind, LP (SCW)

NCR100272

REGIONAL ENTITY

Texas Reliability Entity (Texas RE)

I. REGISTRATION INFORMATION

ENTITY IS REGISTERED FOR THE FOLLOWING FUNCTIONS:

BA DP GO GOP IA LSE PA PSE RC RP RSG TO TOP TP TSP X X

7/11

/07

7/11

/07

*VIOLATION APPLIES TO SHADED FUNCTIONS DESCRIPTION OF THE REGISTERED ENTITY The C amp S prings Wind E nergy C enter (Camp S prings) i s a w ind ene rgy generating plant l ocated i n S curry County, T exas c onsisting o f 87 nom inal 1. 5 M W w ind t urbine generators with a combined total capacity of 130.5 MW. This facility is owned by SCW and oper ated by I nvenergy S ervices LLC ( Invenergy).3

Invenergy ac ts as a gent for some of the Generator Operator (GOP) requirements of SCW. In this capacity, Invenergy per forms r equirements o f a GOP, i ncluding, bu t not l imited t o, s ubmitting generation schedules, resource plans, balancing energy bids, and outage schedules, as well as receiving balancing or out-of-merit instructions and appropriately communicating such instructions to SCW.

1 For purposes of this document and attachments hereto, each violation at issue is described as a “violation,” regardless of its procedural posture and whether it was a possible, alleged or confirmed violation. 2 An expansion of SCW, Scurry County Wind II, LLC, is also included on the NERC Compliance Registry List as both a Generator Owner and Generator Operator under NERC Registry ID NCR10321 as of April 24, 2009. 3 Invenergy is not NERC registered but does own wind plants in the Texas RE region and other regions. Invenergy has broken up its registration by plant or facility location and each of Invenergy’s plants have separate registrations as a GOP.



II. VIOLATION INFORMATION

RELIABILITY STANDARD REQUIREMENT(S) SUB-

REQUIREMENT(S) VRF(S) VSL(S) CIP-001-1 R4 Medium Severe

PURPOSE OF THE RELIABILITY STANDARD AND TEXT OF RELIABILITY STANDARD AND REQUIREMENT(S)/SUB-REQUIREMENT(S) The purpose statement of CIP-001-1 provides: “Disturbances or unusual occurrences, suspected or determined to be caused by sabotage, shall be reported to the appropriate systems, governmental agencies, and regulatory bodies.” CIP-001-1 R4 provides: “Each Reliability Coordinator, Balancing Authority, Transmission Operator, Generator Operator, and Load Serving Entity shall establish communications contacts, as applicable, with local Federal Bureau of Investigation (FBI) or Royal Canadian Mounted Police (RCMP) officials and develop reporting procedures as appropriate to their circumstances.” VIOLATION DESCRIPTION During an April 15, 2009 through April 16, 2009 Compliance Audit, Texas RE found that from S CW’s r egistration dat e o f J uly 11, 2007 until J uly 30, 2008, S CW w as us ing a sabotage reporting procedure that did not include an FBI contact or instructions to notify the FBI. SCW’s current procedures, dated July 31, 2008, include an F BI contact and instructions to notify the contact in accordance with this requirement. RELIABILITY IMPACT STATEMENT- POTENTIAL AND ACTUAL Although S CW’s s abotage p rocedures contact l ist di d not i nclude t he F BI, i t i ncluded Camp S prings/Invenergy m anagement per sonnel, t he Transmission Operator, the Reliability Coordinator and the local Sheriff’s office. Thus, this violation did not pose a serious or substantial risk to the reliability of the bulk power system because local law enforcement would have been contacted if there had been a sabotage event.

Is there a Settlement Agreement Yes No WITH RESPECT TO THE VIOLATION(S), REGISTERED ENTITY

Neither admits nor denies it (settlement only) Admits to it Does not contest it (Including within 30 days)

WITH RESPECT TO THE ASSESSED PENALTY OR SANCTION, REGISTERED ENTITY

Accepts it/Does not contest it



III. DISCOVERY INFORMATION METHOD OF DISCOVERY

Self-Report Self-Certification Compliance Audit Compliance Violation Investigation Spot Check Complaint Periodic Data Submittal Exception Reporting

DURATION DATE(S) 7/11/07 (Date of registration) through 7/30/08 (Mitigation Plan completion)

DATE DISCOVERED BY OR REPORTED TO REGIONAL ENTITY 4/16/09 Is the violation still occurring

Yes No If yes, Explain Remedial Action Directive issued Yes No

Pre to post June 18, 2007 violation Yes No

IV. MITIGATION INFORMATION

FOR FINAL ACCEPTED MITIGATION PLAN:

MITIGATION PLAN NO. MIT-09-1875

Date Submitted to Regional Entity 8/10/09 (dated 6/24/09) Date Accepted by Regional Entity 8/14/09 Date approved by NERC 8/14/09 Date provided to FERC 8/17/09

Identify and explain any versions that were rejected SCW initially submitted a Mitigation Plan on July 2, 2009, dated June 24, 2009. Though initially ac cepted, this was discovered t o c ontain an ad ministrative er ror, w ith an



incorrect V iolation ID Number. S CW was asked to correct t he er ror and resubmit t he Mitigation Plan. SCW did so on August 10, 2009, but did not change the June 24, 2009 date on the Mitigation Plan. MITIGATION PLAN COMPLETED Yes No

Expected completion dates Submitted as complete4

Extensions granted N/A Actual Completion Date 7/31/08

Date of Certification Letter 8/4/09

Certified complete by Registered Entity as of 7/31/08 Date of Verification Letter 3/31/10

Verified complete by Regional Entity as of 7/31/08 Actions taken to mitigate the issued and prevent recurrence SCW has updated its sabotage reporting procedure in order to include an FBI contact. List of evidence reviewed by Regional Entity to evaluate completion of Mitigation Plan or Milestones (for cases in which mitigation is not yet completed, list evidence reviewed for completed milestones) During the April 16, 2009 Compliance Audit, Texas RE auditors reviewed SCW’s most recent sabotage reporting procedure (dated July 31, 2008) and found that it did include an FBI contact.

V. PENALTY INFORMATION TOTAL ASSESSED PENALTY OR SANCTION OF $3,000 FOR ONE VIOLATION OF A RELIABILITY STANDARD. (1) Registered Entity’s compliance history

Previously filed violations of any of the instant Reliability Standard(s) or Requirement(s) thereunder

Yes No

4 The Mitigation Plan incorrectly states that the violation was mitigated on June 24, 2009.



List violations and status

Additional Comments On October 14, 2009, NERC submitted an Omnibus filing under NP10-2-000 which addressed violations for certain registered entities including a violation of CIP-001-1 R4 for Hardee Power Partners Limited, also owned and operated by Invenergy. On November 13, 2009, FERC issued an order stating it would not engage in further review of the violations addressed in the Omnibus Notice of Penalty. Texas RE did not consider the Hardee Power Partners violation to be an aggravating factor in this case because the subject document involved in the violation was specific to SCW and ERCOT and was unrelated to Invenergy. There was nothing in the record to suggest that broader corporate issues were implicated.

Previously filed violations of other Reliability Standard(s) or Requirement(s) thereunder

Yes No List violations and status

Additional Comments October 14, 2009, NERC submitted an Omnibus filing under NP10-2-000 which addressed violations for certain registered entities including a violation of PRC-005-1 R2 for Hardee Power Partners Limited and a violation of VAR-002-1 R1 for Judith Gap Energy LLC, both owned and operated by Invenergy in the FRCC and WECC regions, respectively. On November 13, 2009, FERC issued an order stating it would not engage in further review of the violations addressed in the Omnibus Notice of Penalty. A Settlement Agreement covering violations of PRC-005-1 R1 and R2 for Hardee Power Partners Limited (NOC-180) was filed with FERC under NP11-23-000 on November 30, 2010. On December 30, 2010, FERC issued an order stating it would not engage in further review of the Notice of Penalty. A Notice of Confirmed Violation covering a violation of TOP-003-0 R1 for Forward Energy, LLC, also owned and operated by Invenergy in the MRO region (NOC-654) was filed with FERC under NP11-45-000 on November 30, 2010. On December 30, 2010, FERC issued an order stating it would not engage in further review of the Notice of Penalty. Concurrently being filed is a Settlement Agreement covering a violation of COM-002-2 R1 for Stanton Wind Energy, LLC, also owned and operated by Invenergy in the Texas RE region.



Texas RE determined that these prior violations should not serve as a basis for aggravating the penalty because they involved standards that are not the same or similar to the instant standard. Moreover, there was nothing in the record to suggest that broader corporate issues were implicated.

(2) The degree and quality of cooperation by the Registered Entity

Full cooperation If No, Explain

(3) The presence and quality of the registered entity’s compliance program IS THERE A DOCUMENTED COMPLIANCE PROGRAM

YES NO UNDETERMINED EXPLAIN

During the April 16, 2009 Compliance Audit, Texas RE determined that SCW had a compliance program supported by senior management.5

According to the terms of the Settlement Agreement, SCW has agreed to improve its compliance program by implementing the following actions.

SCW is being provided operations and compliance guidance by Invenergy Wind North America LLC (Invenergy Wind). While not a NERC requirement, Invenergy Wind created and filled a full-time compliance manager position on December 1, 2009 to assist plant operations personnel understand their responsibilities for compliance with NERC Reliability Standards. The compliance manager subsequently has updated its compliance program and process, effective February 26, 2010, for all Invenergy Wind-affiliate generating facilities. The compliance manager also has instituted monthly compliance meetings, the first of which took place on January 19, 2010, which include all operating Invenergy Wind-affiliate generating facilities. The routine meetings facilitate the sharing of information among diverse regions and helps establish best practices for use at each generating facility. The compliance program also provides template documents for use at all affiliate generating facilities. These procedures were recently reviewed, updated, and re-formatted to contain additional information to assist operations personnel in maintaining Standards compliance. The facility implementation is scheduled to be complete in the fourth quarter of 2010. Routine internal certifications, intended to stimulate review of

5 While Texas RE did review SCW’s compliance program, the compliance program was not considered a mitigating factor in determining the settlement amount.



facility performance and compliance with Standards, are also included in the compliance program. The Camp Springs facility recently completed the inaugural internal certification in June 2010.

EXPLAIN SENIOR MANAGEMENT’S ROLE AND INVOLVEMENT WITH RESPECT TO THE REGISTERED ENTITY’S COMPLIANCE PROGRAM, INCLUDING WHETHER SENIOR MANAGEMENT TAKES ACTIONS THAT SUPPORT THE COMPLIANCE PROGRAM, SUCH AS TRAINING, COMPLIANCE AS A FACTOR IN EMPLOYEE EVALUATIONS, OR OTHERWISE. Senior management created the Operations and Maintenance Services group in order to address the need for a NERC Reliability Program. Senior management supports the O&M Services group with sufficient resources, staffing needs, training, and encourages the use of external consulting firms, if needed.

(4) Any attempt by the Registered Entity to conceal the violation(s) or information needed to review, evaluate, or investigate the violation(s) Yes No If Yes, Explain (5) Any evidence the violation(s) were intentional

Yes No If Yes, Explain (6) Any other mitigating factors for consideration

Yes No If Yes, Explain (7) Any other aggravating factors for consideration Yes No If Yes, Explain (8) Any other extenuating circumstances

Yes No If Yes, Explain



EXHIBITS 1. June 12, 2009 – Scurry County Wind, LP Public Audit Report 2. August 10, 2009 – Corrected Mitigation Plan dated June 24, 2009 and submitted

by SCW to Texas RE 3. August 10, 2009 – Mitigation Plan Completion Letter submitted by SCW to Texas

RE dated August 4, 2009 4. March 31, 2010 – Texas RE letter to SCW verifying completion of Mitigation Plan

OTHER RELEVANT INFORMATION: NOTICE OF ALLEGED VIOLATION AND PROPOSED PENALTY OR SANCTION ISSUED

Date 6/1/10 Or N/A

SETTLEMENT DISCUSSIONS COMMENCED Date 6/28/10 Or N/A

NOTICE OF CONFIRMED VIOLATION ISSUED

Date Or N/A

SUPPLEMENTAL RECORD INFORMATION Date(s) Or N/A

REGISTERED ENTITY RESPONSE CONTESTED FINDINGS PENALTY BOTH Did not Contest

HEARING REQUESTED Yes No

Date Outcome Appeal Requested


Attachment b

Texas RE’s Public Compliance Audit Report for CIP-001-1 R4 dated June 12, 2009

2700 Via Fortuna, Suite 225 Austin, Texas 78746 Tel: 512.225.7000 Fax: 512.225.7165

Scurry County Wind LP NERC ID # NCR10027

Audit Report for Compliance with

NERC Reliability Standards Public Version Confidential Information (including Privileged and Critical Energy Infrastructure Information) Has Been Removed

Audit Date: April 15 - 16, 2009

Audit Location: Austin, Texas

Report Date: June 12, 2009

Prepared By: Kent Grammer, Audit Team Leader

Confidential Information (Including Privileged and Critical Energy Infrastructure Information) Has Been Removed

Page 2 of 7 SCURRY COUNTY WIND, LP COMPLIANCE AUDIT REPORT JUNE 12, 2009

TABLE OF CONTENTS

1.0 Executive Summary ................................................................................... 3

2.0 Audit Process ............................................................................................. 3

2.1 Objectives .................................................................................................. 3

2.2 Scope ......................................................................................................... 3

2.3 Methodology .............................................................................................. 4

2.4 Company Profile ........................................................................................ 4

2.5 Audit Specifics ........................................................................................... 5

3.0 Audit Results .............................................................................................. 5

3.1 Findings ..................................................................................................... 5

3.2 Conclusion ................................................................................................. 7

3.3. Compliance Culture ................................................................................... 7



1.0 EXECUTIVE SUMMARY A Table Top compliance audit of Scurry County Wind LP (SCW) was conducted on April 15 and 16, 2009. The NERC Reliability Standards that are being actively monitored for 2009 were reviewed based on SCW’s registration as a Generator Owner (GO) and Generator Operator (GOP). The audit team consisted of four representatives from Texas Regional Entity (Texas RE). Based on the review of documentation pr ovided by SCW and the interviews of SCW’s personnel, SCW met all of the NERC Standard requirements. This audit report includes information regarding the requirements that were missing for SCW’s possible compliance violations. This information will be use d to help determine the severity level of sanctions and penal ties. The possible compliance v iolations will be pr ocessed t hrough the Texas RE’s NERC Compliance M onitoring and E nforcement P rogram. A ny f urther ac tions related t o possible compliance violations will follow the same process. 2.0 AUDIT PROCESS The co mpliance audi t p rocess is detailed in the NE RC C ompliance M onitoring and Enforcement Program (CMEP), available at www.nerc.com. The NERC CMEP generally conforms to the United States Government A ccountability O ffice Government A uditing S tandards and ot her g enerally accepted audit practices. 2.1 Objectives All registered entities are subject to audit for compliance with all reliability standards applicable to the functions for which the registered entity is registered.1

• Independently review SCW’s compliance with the requirements of the reliability standards that are applicable to SCW based on the SCW’s registered functions.

The audit objectives are:

• Validate co mpliance w ith applicable r eliability standards from t he NERC 2009 CMEP Implementation Plan list of actively monitored standards.

• Validate ev idence of self-reported v iolations and pr evious self-certifications, co nfirm compliance w ith ot her requirements of the reliability st andard, and r eview t he st atus of associated mitigation plans.

• Document SCW’s compliance culture. 2.2 Scope The scope of this compliance audit is inclusive of all requirements of the NERC Reliability Standards that are being actively monitored in 2009 and any others that may be identified by the audit team at the t ime of the audit applicable to GO, GOP. The audi t was performed by four members of Texas RE. For the 2009 compliance program, the monitoring period for the compliance audit will generally be the last three years, the time since SCW last audit as a GO, GOP, or periods specified in individual reliability standards. T he monitoring period is not l imited to the t ime period for which penalties and sanctions are assessed. 1 North American Electric Reliability Corporation CMEP, paragraph 3.1, Compliance Audits

http://www.nerc.com/�



2.2.1 Confidentiality and Conflict of Interest Confidentiality ag reements and code o f conduct documentation f or t he regional ent ity st aff w ere provided to SCW prior to the audi t. Work history and co nflict o f interest forms submitted for each audit team member were pr ovided t o SCW. SCW was given an oppo rtunity t o obj ect t o an a udit team member on t he basis of a possi ble conflict of interest or the existence of other circumstances that could interfere with the audit team member’s impartial performance of duties. SCW accepted the audit team member participants with no objections. 2.3 Methodology Once an audit date was set by Texas RE, SCW was sent a pre-audit questionnaire and the Reliability Standard Audit Work Sheets (RSAWs) for the list of actively monitored NERC Standards. During the audit, Texas RE r eviewed the r esponses to t he RSAWs and pre-audit q uestions with SCW’s management and supervisors. Texas RE audit team interviewed operations personnel and reviewed documents to substantiate those ope rations pe rsonnel w ere trained an d ca pable o f following t he procedures to ensu re r eliable oper ations from t hat ent ity. T he audi t t eam al so i nterviewed I T, Communications, and Planning per sonnel as necessary to get answ ers to questions and v erify documentation. The audit team conducted an exit briefing immediately following the audit with SCW. The audit team verbally shared its preliminary results with SCW’s management. 2.4 Company Profile Chicago based Invenergy LLC is a leading clean energy company focused on the development, ownership, operation and management of large-scale electricity generation assets in the North American and European markets. The Company serves a wide range of utilities, load serving entities, energy merchants and industrial customers. Invenergy’s electric generation assets primarily include large scale wind energy and clean natural gas fueled electric generating facilities. Founded in 2001, the Company has a superior track record in the energy industry and a highly experienced management team. The members of Invenergy’s senior management team have an average experience of approximately 20 years in diverse areas of the energy market including development, engineering, construction, finance, operations, asset management, and energy trading and contracting. Invenergy is headquartered in Chicago and has North American regional offices located in Denver, Washington D.C. and Toronto. International development is focused on the European wind energy market with activities centered in London, England and Warsaw, Poland. Invenergy is in the process of building a portfolio of clean and renewable energy projects in North America and Europe by:

- Developing wind energy projects - Developing thermal energy projects utilizing clean fuels such as natural gas - Acquiring power generation projects in development, construction and operation - Developing alternative energy sources such as solar power generation and ethanol



Invenergy currently has projects totaling nearly 4,000 Megawatts (MW) in construction or operation. Most of these projects have long term hedges or contracts for electricity sales. This portfolio includes projects generating electricity with wind turbines as well as conventional thermal electricity generating facilities utilizing clean-burning fuels such as natural gas. 2.5 Audit Specifics

Audit Date: April 15 - 16, 2009 Audit Location: Texas RE’s Office

Texas RE Audit Team:

Name Company/Title Kent Grammer Texas RE/Audit Team Leader Mark Scovill Texas RE/Auditor Scott Jackson Texas RE/Auditor Dan Kueker Texas RE/Auditor

SCW Audit Participants:

Name Company/Title John Bacon Invenergy – Operations Manager Guy Payne Invenergy – Regulatory Manager Kendra Weatherford Business Manager - Operation Mark A. Gorfen Invenergy – Plant Manager James Rafferty Invenergy – Asset Manager Chris Ray Fulcrum Power Jessica Kronman Fulcrum Power Bryan Tyson Fulcrum Power Eduardo Perez Jr. Director, O & M Services

3.0 AUDIT RESULTS 3.1 Findings The Compliance Audit Team found possible violations with the following standards and requirements:

Reliability Standard & Requirement Description of Non-Compliance

CIP-001, R4 Lack of FBI contact in the procedure prior July, 2008

The following table is a summary of the auditor’s notes for those NERC standards reviewed during the audit:



Reliability Standard

Requirement Finding

CIP-001-1 R1. Compliant CIP-001-1 R2. Compliant CIP-001-1 R3. Compliant

CIP-001-1 R4. Possible Violation

COM-002-2 R1. Compliant EOP-009-0 R1. N/A EOP-009-0 R2. N/A FAC-008-1 R1. Compliant FAC-008-1 R2. N/A FAC-008-1 R3. N/A FAC-009-1 R1. Compliant FAC-009-1 R2. N/A

IRO-004-1 R1. Compliant IRO-005-1 R9. N/A IRO-005-1 R13. Compliant IRO-005-1 R17. N/A PRC-001-1 R1. Compliant PRC-001-1 R2. Compliant PRC-001-1 R3. Compliant PRC-001-1 R5. Compliant PRC-004-1 R2. N/A

PRC-004-1 R3. N/A

PRC-005-1 R1. Compliant PRC-005-1 R2. N/A PRC-017-0 R1. N/A PRC-017-0 R2. N/A

TOP-001-1 R6. N/A TOP-001-1 R7. N/A TOP-002-2 R3. Compliant TOP-002-2 R13. N/A TOP-002-2 R14. Compliant TOP-002-2 R15. Compliant TOP-002-2 R18. Compliant



Reliability Standard

Requirement Finding

TOP-003-0 R1. Compliant TOP-003-0 R2. Compliant TOP-003-0 R3. N/A

3.2 Conclusion The Compliance Audit T eam f ound t hat SCW had possi ble vi olations with the f ollowing standards and requirements:

Reliability Standard & Requirement CIP-001, R4

The possible compliance violations along with this compliance report will be provided to the regional entity co mpliance st aff for pr ocessing t hrough t he N ERC C MEP. A ny further ac tions related to possible compliance violations will be through that process. 3.3. Compliance Culture SCW was cooperative and forthcoming with all questions and requests made by the audit team. Senior m anagement i s supportive o f SCW’s compliance pr ogram. B ased on t he i nterviews and documentation presented, SCW has a compliance program in place which promotes compliance with the NERC Standards

Attachment c

SCW’s Mitigation Plan MIT-09-1875 for CIP-001-1 R4 dated June 24, 2009 and submitted August

10, 2009

An Independent Division of EReor

Mitigation Plan Submittal Form

Date this Mitigation Plan is being submitted: 6/24/09

If this Mitigation Plan has already been completed: • Check this box [gJ and • Provide the Date of Completion of the Mitigation Plan: 6/24/09

Section A: Compliance Notices

• Section 6.2 of the CMEp1 sets forth the information that must be included in a Mitigation Plan. The Mitigation Plan must include:

(1) The Registered Entity's point of contact for the Mitigation Plan, who shall be a person (i) responsible for filing the Mitigation Plan, (ii) technically knowledgeable regarding the Mitigation Plan, and (iii) authorized and competent to respond to questions regarding the status of the Mitigation Plan. This person may be the Registered Entity's point of contact described in Section 2.0.

(2) The Alleged or Confirmed Violation(s) of Reliability Standard(s) the Mitigation Plan will correct.

(3) The cause of the Alleged or Confirmed Violation(s). (4) The Registered Entity's action plan to correct the Alleged or Confirmed

Violation(s). (5) The Registered Entity's action plan to prevent recurrence of the Alleged or

Confirmed violation(s). (6) The anticipated impact of the Mitigation Plan on the bulk power system reliability

and an action plan to mitigate any increased risk to the reliability of the bulk power-system while the Mitigation Plan is being implemented.

(7) A timetable for completion of the Mitigation Plan including the completion date by which the Mitigation Plan will be fully implemented and the Alleged or Confirmed Violation(s) corrected.

(8) Implementation milestones no more than three (3) months apart for Mitigation Plans with expected completion dates more than three (3) months from the date of submission. Additional violations could be determined for not completing work associated with accepted milestones.

(9) Any other information deemed necessary or appropriate. (10) The Mitigation Plan shall be signed by an officer, employee, attorney or other

authorized representative of the Registered Entity, which if applicable, shall be the person that signed the Self-Certification or Self Reporting submittals.

• This submittal form may be used to provide a required Mitigation Plan for review and approval by Texas Regional Entity (Texas RE) and NERC.

• The Mitigation Plan shall be submitted to the Texas RE and NERC as confidential information in accordance with Section 1500 of the NERC Rules of Procedure.

1 "Uniform Compliance Monitoring and Enforcement Program of the North American Electric Reliability Corporation;" a copy of the current version approved by the Federal Energy Regulatory Commission is posted on NERC's website.

7620 Metro Center Drive Austin, Texas 78744 Tel: (512) 225-7000 Fax: (512) 225-7165

TRE CONFIDENTIAL



An Illdependent Division of ERCOT

• This Mitigation Plan form may be used to address one or more related violations of one Reliability Standard. A separate mitigation plan is required to address violations with respect to each additional Reliability Standard, as applicable.

• If the Mitigation Plan is approved by Texas RE and NERC, a copy of this Mitigation Plan will be provided to the Federal Energy Regulatory Commission in accordance with applicable Commission rules, regulations and orders.

• Texas RE or NERC may reject Mitigation Plans that they determine to be incomplete or inadequate.

• Remedial action directives also may be issued as necessary to ensure reliability of the bulk power system.

Section B: Registered Entity Information

B.1 Identify your organization:

Company Name: Scurry County Wind LP Company Address: One South Wacker, Ste. 1920 Chicago, IL 60606 NERC Compliance Registry 10 [if known}: NCR10027

B.2 Identify the individual in your organization who will serve as the Contact to Texas RE regarding this Mitigation Plan. This person shall be technically knowledgeable regarding this Mitigation Plan and authorized to respond to Texas RE regarding this Mitigation Plan.

Name: Title: Email: Phone:

Guy Payne Regional Operations Manager G Payne@!nvenergyllc.com 325-574-1601

Section c: Identity of Reliability Standard Violations Associated with this Mitigation Plan

This Mitigation Plan is associated with the following violation(s) of the reliability standard listed below:

C.1 Standard: CIP-001-1 [Identify by Standard Acronym (e.g. FAC-001-1)]

PAGE 2 oF? TRE CONFIDENTIAL For Public Release - January 31, 2011

C.2 Requirement(s) violated and violation dates: [Enter information in the following Table]

NERC Violation ID # Texas RE Requirement [if known] Violation I D # Violated

[if known] (e.g. R3.2)

TRE200800071 R4


Violation Date(*)

7/11/07-7/31/08

(*) Note: The Violation Date shall be: (i) the violation occurred; (ii) the date that the violation was selfreported; or (iii) the date that the violation has been deemed to have occurred on by Texas RE. Questions regarding the date to use should be directed to the Texas RE.

C.3 Identify the cause of the violation(s) identified above: [Provide your response here; additional detailed information may be provided as an attachment as necessary]

From registration date of July 11, 2007 until July 31, 2008, Scurry was using a sabotage procedure that did not include an FBI contact. Scurry's current procedures include an FBI contact (dated July 31, 2008) bringing Scurry into compliance with this requirement.

CA [Optional] Provide any relevant additional information regarding the violations associated with this Mitigation Plan:

[Provide your response here; additional detailed information may be provided as an attachment as necessary]

Section D: Details of Proposed Mitigation Plan

Mitigation Plan Contents

D.1 Identify and describe the action plan, including specific tasks and actions that your organization is proposing to undertake, or which it undertook if this Mitigation Plan has been completed, to correct the violations identified above in Part C.2 of this form: [Provide your response here; additional detailed information may be provided as an attachment as necessary]

No action plan required. As stated above, Scurry County Wind LP's current procedures (attached) include an FBI contact (dated July 31, 2008) brining Scurry

PAGE 3 OF 7 TRE CONFIDENTIAL For Public Release - January 31, 2011


An Independent Division of ERCOT

County Wind LP into compliance with this requirement. FBI Contact was verified to be correct.

Check this box r:8J and proceed to Section E of this form if this Mitigation Plan, as set forth in Part 0.1, has already been completed; otherwise respond to Part 0.2, 0.3 and, optionally, Part 0.4, below.

Mitigation Plan Timeline and Milestones

0.2 Provide the timetable for completion of the Mitigation Plan, including the completion date by which the Mitigation Plan will be fully implemented and the violations associated with this Mitigation Plan are corrected:

0.3 Enter Milestone Activities, with completion dates, that your organization is proposing for this Mitigation Plan:

Milestone Activity Proposed Completion Oate* (shall not be more than 3 months apart)

(*) Note: Implementation milestones no more than three (3) months apart for Mitigation Plans with expected completion dates more than three (3) months from the date of submission. Additional violations could be determined for not completing work associated with accepted milestones.

[Note: Provide your response here; additional detailed information may be provided as an attachment as necessary]

Additional Relevant Information (Optional)

0.4 If you have any relevant additional information that you wish to include regarding the mitigation plan, milestones, milestones dates and completion date proposed above you may include it here:


PAGE40F7 TRE CONFIDENTIAL For Public Release - January 31, 2011


An Independenf Division of EReOT

Section E: Interim and Future Reliability Risk

Check this box ~ and proceed and respond to Part E.2 and E.3, below, if this Mitigation Plan, as set forth in Part D.1, has already been completed.

Abatement of Interim BPS Reliability Risk

E.1 While your organization is implementing the Mitigation Plan proposed in Part 0 of this form, the reliability of the Bulk Power System may remain at higher risk or be otherwise negatively impacted until the plan is successfully completed. To the extent they are, or may be, known or anticipated: (i) identify any such risks or impacts; and (ii) discuss any actions that your organization is planning to take or is proposing as part of the Mitigation Plan to mitigate any increased risk to the reliability of the bulk power system while the Mitigation Plan is being implemented:


Prevention of Future BPS Reliability Risk

E.2 Describe how successful completion of the Mitigation Plan as laid out in Part 0 of this form will prevent or minimize the probability that your organization incurs further violations of the same or similar reliability standards requirements in the future: [Provide your response here; additional detailed information may be provided as an attachment as necessary]

Scurry County Wind LP is in compliance as of July 31, 2008, per Texas Regional Entity. Procedures will be reviewed annually to ensure the information is up to date and correct.

E.3 Your organization may be taking or planning other action, beyond that listed in the Mitigation Plan, as proposed in Part 0.1, to prevent or minimize the probability of incurring further violations of the same or similar standards requirements listed in Part C.2, or of other reliability standards. If so, identify and describe any such action, including milestones and completion dates: [Provide your response here; additional detailed information may be provided as an attachment as necessary]

Scurry County Wind LP will periodically ensure that contact information is correct and up to date.

PAGE50F7 TRE CONFIDENTIAL For Public Release - January 31, 2011


.0 •••• __ ._-

An Independenf Division of EReOT

Section F: Authorization

An authorized individual must sign and date this Mitigation Plan Submittal Form. By doing so, this individual, on behalf of your organization:

a) Submits the Mitigation Plan, as laid out in Section D of this form, Texas RE for acceptance by Texas RE and approval by NERC, and

b) If applicable, certifies that the Mitigation Plan, as laid out in Section D of this form, was completed (i) as laid out in Section D of this form and (ii) on or before the date provided as the 'Date of Completion of the Mitigation Plan' on this form, and

c) Acknowledges:

1. I am the NERC Compliance Manager of Scurry County Wind LP.

2. I am qualified to sign this Mitigation Plan on behalf of Scurry County Wind LP.

3. I have read and understand Scurry County Wind LP's obligations to comply with Mitigation Plan requirements and ERG remedial action directives as well as ERG documents, including, but not limited to, the NERC Rules of Procedure, including Appendix 4(C) (Compliance Monitoring and Enforcement Program of the North American Electric Reliability Corporation" (NERC CMEP)).

4. I have read and am familiar with the contents of the foregoing Mitigation Plan.

5. Scurry County Wind LP agrees to be bound by, and comply with, the Mitigation Plan, including the timetable completion date, as accepted by Texas RE and approved by NERC.

Authorized Individual Signature

Name (Print):Eduardo Perez Title: NERC Compliance Manager Date: 6/24/09



An Independent Division of ERcor

Section G: Comments and Additional Information

You may use this area to provide comments or any additional relevant information not previously addressed in this form.


Submit completed and signed forms to [email protected]

Please direct any questions regarding completion of this form to:

Texas Regional Entity Rashida Caraway 512-225-7056 rash ida. [email protected]


Attachment d

SCW’s Certification of Mitigation Plan Completion for CIP-001-1 R4 dated August 4,

2009 and submitted August 10, 2009

Invg~;nergy Scurry County Wind, L.P. 6543 E Highway 180 Snyder, TX 79549

August 4, 2009

Jeff Whitmer Manager, Compliance Enforcement Texas Regional Entity

RE: Completion of Scurry County Wind, L.P. Mitigation Plans

Scurry County Wind, L.P. has completed the following Mitigation Plans:

NERC Violation ID Standard Requirement TRE200900071 CIP-OOl-l R4

Copies of the Mitigation Plans are attached for your reference.

Please contact Eduardo Perez, NERC Compliance Manager, or Guy Payne, Texas Regional Manager, with any questions and/or concerns.

Sincerely,

SCURRY COUNTY WIND, L.P.

BY:

BY:

SC~ts General Partner

Steven Ryder, Vice President

cc: Guy Payne - Scurry County Wind, L.P. Alex George - Invenergy LLC Eduardo Perez - Invenergy LLC Jamie Raffeliy - Invenergy LLC Kendra Weatherford - Invenergy LLC Chris Ray - Fulcrum Power

Attachment e

Texas RE’s Verification of Mitigation Plan Completion for CIP-001-1 R4 dated March 31,

2010

2700 Via Fortuna, Suite 225 TRE C Austin, Texas 78746 Tel: (512) 225-7000 Fax: (512) 225-7165

March 31, 2010 Austin Hill O & M Manager [email protected] Scurry County Wind, LP NERC ID#: NCR10027 Violation Numbers: TRE200900071 Re: Texas Regional Entity (“Texas RE”) Mitigation Plan Verification of Completion Austin Hill: As a result of an audit, dated April 16, 2009, it was determined that Scurry County Wind, LP (“Scurry County”) was using a sabotage reporting procedure that did not include an FBI contact from the date of registration (July 11, 2007) through July 31, 2008. This constitutes an Alleged Violation of NERC Reliability Standard CIP-001-1, R4.

On August 4, 2009, Scurry County certified that the mitigation plan for violation TRE200900071 (CIP-001-1, R4) was completed as of July 31, 2008. Texas RE confirmed this during the Audit, where auditors reviewed Scurry County’s most recent sabotage reporting procedure (dated July 31, 2008) and found that it did include an FBI contact listed.

Based on evidence presented by Scurry County and reviewed by Texas RE, this letter confirms the above mentioned mitigation plans are complete. If you have any questions, please feel free to contact Andy Oliver at (512) 275-7542 or via e-mail at [email protected].


Scurry County Wind, LP

Page 2 of 2 TRE CONFIDENTIAL

Respectfully submitted, Rashida Caraway Texas Regional Entity Manager, Compliance Enforcement (512) 225-7056 Email: [email protected]


mailto:[email protected]�

Attachment f

Notice of Filing

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Scurry County Wind LP Docket No. NP11-___-000

NOTICE OF FILING January 31, 2011

Take notice that on January 31, 2011, the North American Electric Reliability

Corporation (NERC) filed a Notice of Penalty regarding Scurry County Wind LP in the Western Electricity Coordinating Council region.

Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission’s Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.

The Commission encourages electronic submission of protests and interventions

in lieu of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 14 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426.

This filing is accessible on-line at http://www.ferc.gov, using the “eLibrary” link and is available for review in the Commission’s Public Reference Room in Washington, D.C. There is an “eSubscription” link on the web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected], or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659. Comment Date: [BLANK]

Kimberly D. Bose, Secretary

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