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MIDWEST RELIABILITY MATTERS Inside This Issue CEO MESSAGE DECEMBER 2019 “Year’s end is neither an end nor a beginning, but a going on. With all the wisdom that experience can instill in us.” -Hal Borland MIDWEST RELIABILITY MATTERS Inside This Issue CEO MESSAGE 3 CEO Message 6 Compliance Monitoring and Enforcement Program 9 Registration, Certification and Standards 14 Tips and Lessons Learned 17 Bulk Power System Reliability 21 Security Corner 22 Outreach and Engagement 24 MRO Gives Back 28 Industry News and Events Midwest Reliability Matters - December 2019 CEO MESSAGE Reflecting on 2019 Finishing A Successful And Seamless Transition For me, the month of December lends itself to both personal and professional reflection. Annual holiday gatherings with friends and family serve as reminders of the inevitable passage of time. Children grow, families change, traditions evolve, old memories are cherished, and new memories are made. Jack Kornfield, in Buddha’s Little Instruction Book, says, “The trouble is, you think you have time.” It’s this time of year that I contemplate and am grateful for all that I have, for the opportunities that have presented themselves over the years, both professionally and personally, and for the time I have been privileged to spend with others dedicated to supporting a reliable and secure North American bulk power system. From a professional standpoint, as the year draws to a close, I reflect on the challenges we faced as an organization and all that we accomplished in 2019. We made steady progress towards our strategic priorities and achieved a great deal in just twelve short months. Most noteworthy is the completion of the remaining activities associated with the transition of registered entities and work from the former Southwest Power Pool Regional Entity. You might recall that several governance changes were made in 2018 to encourage participation from entities across our newly expanded footprint—four members were added to the MRO Board of Directors, the board was restructured to facilitate greater alignment and coordination with its organizational groups, and MRO’s organizational group structure was reinvented to be more effective and efficient—with all of these changes fully implemented in 2019. 3 CEO MESSAGE In rethinking MRO’s organizational group structure, staff used the existing MRO Security Advisory Council as a template for creating more engagement and leveraging the technical expertise of industry stakeholders. The Compliance, Operations, Planning and Standards Committees were retired and replaced by the CMEP Advisory Council and Reliability Advisory Council, which began work in 2019 and have far exceeded initial performance expectations. In addition to providing critical input on regional risk, the three advisory councils more than doubled the amount of outreach conducted in 2019 to promote awareness and share information across the region. Tasked with overseeing the advisory councils, the board’s new “What we accomplished Organizational Group Oversight Committee (OGOC) met in person in 2019 demonstrates a during the first three quarters of the year with one of the three advisory councils. These meetings enabled closer coordination between the commitment to our vision, board and council members on work activities and deliverables. In the and is a reflection of fourth quarter, the OGOC met with chairs and vice chairs of all three advisory councils in a strategic planning session to discuss regional the smart, talented and risk and determine the appropriate areas of focus for the advisory extraordinary people that councils in 2020. This meeting was the first of its kind for MRO, bringing together members of the board, staff, and technical experts I am privileged to work from our industry stakeholders to holistically consider how we address with—both at MRO and risk and execute our work in a collaborative, effective and efficient manner that supports our shared vision of a highly reliable and secure across the entire ERO North American bulk power system. By all accounts, it was a huge ecosystem.” success. Also in November 2019, the compliance and enforcement authority responsibilities for Southwest Power Pool were transferred from NERC to MRO. This effort, in addition to expanding the board and standing up the advisory councils, was the final milestone related to the transition of entities from the former SPP RE to MRO. While integration efforts continue, I can proudly say that a successful and seamless transition has been completed. What we accomplished in 2019 demonstrates a commitment to our vision, and is a reflection of the smart, talented and extraordinary people that I am privileged to work with—both at MRO and across the entire ERO ecosystem. It has been an incredibly strong year; credit which is owed to many—our staff, board members, industry stakeholder partners, and colleagues across the ERO Enterprise. Thank you for your continued support! However you celebrate the holiday season, on behalf of everyone here at MRO, I wish you and your loved ones happiness, laughter, peace and good health. I look forward to all we will accomplish together in the year ahead. Our future is bright! -Sara Patrick, MRO President and CEO 4 Midwest Reliability Matters - December 2019 Employee Spotlight Please join us in weloming the following individuals to the MRO Team: Dr. Uttam Adhikari joined MRO’s Risk Assessment and Mitigation Department as an engineer in the Operations and Planning area. Uttam joined MRO from PEAK Reliability, where he had experience as an EMS Application Engineer. Uttam has a PhD in Electrical and Computer Engineering. Tasha Ward joined MRO as Senior Enforcement Attorney and Corporate Counsel. Tasha began her le- gal career as a Judicial Law Clerk for The Honorable Jim Gunter, Associate Justice Arkansas Supreme Court. She has extensive enforcement experience having worked for both SERC and the Southwest Power Pool Regional Entity (SPP RE) as an enforcement attorney. Most recently she had the opportunity to gain experience from the point of view of a registered entity as SPP’s Lead Compliance Monitoring and Enforcement Specialist. MRO is hiring! We currently have the following open positions on our website: • Manager of Compliance, Critical Infrastructure Protection (CIP) • Manager of Compliance, Operations and Planning • Risk Assessment and Mitigation Engineer, CIP Sr, II or III • Compliance Engineer, CIP Senior II or III • Compliance Engineer, Ops & Planning, Senior II or III Watch our Why Work For MRO video to learn more about us. To apply, visit the Careers Page on our website or visit us on LinkedIn. Happy Holidays From MRO! Click to view our 2019 Holiday Greeting 5 COMPLIANCE monitoring AND ENFORCEMENT PROGRAM COMPLIANCE MONITORING AND ENFORCEMENT PROGRAM Development and Deployment of Internal Controls Building on Julie Sikes’ internal controls article found in the October 2019 issue of Midwest Reliability Matters, the Compliance Monitoring and Enforcement Program Advisory Council (CMEPAC) will write a series of internal control articles that will be supplemented by forthcoming webinars. This article begins our series by suggesting how an entity could identify its highest risk standards and requirements, and develop documented internal controls that can be employed to reasonably assure compliance expectations are being met. NERC published the 2020 Compliance Monitoring and Enforcement Program Implementation Plan (CMEP IP), which lists 7 risk elements identifying 29 Reliability Standards and 42 requirements as “ERO Enterprise-wide risks to reliability.” MRO published its 2020 Self-Certification Schedule and Timeline based on the list of 2020 CMEP IP standards and requirements. Each registered entity should review these documents to identify which applicable standards and requirements introduce the greatest risks to reliability, and focus on building sound internal controls to mitigate (or reduce) these risks. Each registered entity can expand on this list for areas that present a higher risk within its company (i.e., use of Operating Instructions). Working with its list of higher risk standards and requirements (selected by NERC/MRO and the registered entity), the registered entity can now develop and apply sound internal controls to assure that compliance objectives are met. Sikes explained that there are three types of internal controls that registered entities should employ: preventative, detective and corrective. Simply defined as: • Preventive: An internal control designed to avoid an unintended event or consequence. Example: using a recurring reminder to ensure that all review dates are met within described timelines established by a requirement. 6 Midwest Reliability Matters - December 2019 • Detective: An internal control designed to identify errors or deviations from the norm. Example: scheduled review of maintenance evidence and finding a section of a maintenance checklist that was overlooked or incomplete. • Corrective: An internal control designed to fix a problem that may have risen. Example: triggering a self-report and mitigation plan process when a requirement objective has not been met. All internal controls should identify the following items, which make up the internal control (based on past Performance Risk and Oversite Subcommittee). 1. Risk Identification 2. Control Objective 3. Control Activity 4. Risk Triggers 5. Sample Size A brief example of an internal control for reviewing Operating Instructions (OIs) could be: 1. Risk Identified: The failure to use three-part communication when issuing or receiving
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