Southwest Power Pool (SPP)

February 18, 2014

VIA ELECTRONIC FILING The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C. 20426

Re: Southwest Power Pool, Inc., Docket Nos. ER12-1179-015 (Certification of Southwest Power Pool, Inc. as the Balancing Authority for the SPP Balancing Authority Area)

Dear Secretary Bose:

Pursuant to Rule 1907 of the Federal Energy Regulatory Commission’s (“Commission”) Regulations, 18 C.F.R. § 385.1907, and in compliance with the Commission orders issued in this proceeding, Southwest Power Pool, Inc. (“SPP”) submits the attached materials from the North American Electric Reliability Corporation (“NERC”) confirming SPP’s certification as the Balancing Authority (“BA”) for the SPP BA area1, effective March 1, 2014. This instant filing is supplemental to SPP’s December 27, 2013 filing in this docket, wherein SPP submitted its Certification Statement of readiness to implement the Integrated Marketplace.2

Included in this filing as Exhibit 1 are NERC’s cover letter dated February 14, 2014 and the official certificate confirming NERC’s certification of SPP as the SPP BA. Also included in this filing as Exhibit 2 is a copy of NERC’s BA Certification Final Report issued February 6, 2014.

1 A key component of SPP’s readiness to assume operational functions for the

Integrated Marketplace is certification as the BA for the SPP region. Upon implementation of the Integrated Marketplace, SPP will become the BA for the SPP region, and will assume functional responsibility for the BA function when the current 16 BAs in the footprint are consolidated into one SPP BA. Upon assumption of the BA function, SPP will become the registered entity with NERC, and SPP shall be responsible for compliance with mandatory reliability standards.

2 Certification of Readiness to Implement the Integrated Marketplace by Southwest Power Pool, Inc., Docket No. ER12-1179-015 (Dec. 27, 2013) (“December 27 Filing”).

The Honorable Kimberly D. Bose February 18, 2014 Page 2

SPP’s certification of market readiness as reflected in the December 27 Filing and this instant filing reflect the facts and circumstances existing as of this date. In the event SPP experiences a material change in facts or circumstances between the date of this filing and March 1, 2014, SPP will utilize its best judgment to determine whether any delay to the start-up of the Integrated Marketplace is necessary,3 and will so inform the Commission through additional filings.

Based on the foregoing reasons, SPP submits that it has met all the Commissions’ compliance requirements to be certified as the operator and administrator of the Integrated Marketplace and the SPP BA. Therefore, SPP respectfully requests the Commission approve SPP to implement the Integrated Marketplace effective March 1, 2014.

Respectfully submitted,

/s/ Matthew Harward Matthew Harward Southwest Power Pool, Inc. 201 Worthen Drive Little Rock, AR 72223 Telephone: (501) 614-3560 [email protected] Attorney for Southwest Power Pool, Inc.

3 See Sw. Power Pool, Inc., 118 FERC ¶ 61,055 (2007) at PP 18, 20 (in accepting

SPP’s readiness certification for the EIS Market, the Commission recognized SPP’s establishment of a “Go/No-Go Advisory Team” to determine whether delay was required). See also Midwest Independent Transmission System Operator, Inc., 110 FERC ¶ 61,289 (2005) at P 38 (in accepting MISO’s readiness certification, the Commission explicitly acknowledges MISO’s commitment to delay market start-up in the event of any material contingencies arising post-certification).

Exhibit 1

3353 Peachtree Road NE

Suite 600, North Tower

Atlanta, GA 30326 404-446-2560 | www.nerc.com

Jack Wiseman Manager, Organization Registration and Certification

Cover Letter Sent Via E-Mail Hard Copy Cover Letter and SPP Certificate to Follow

2/14/2014 Mr. Philip Propes Director, Compliance Southwest Power Pool 201 Worthen Drive Little Rock, AR 72223-4936 [email protected] Re: Certification of Southwest Power Pool (SPP) (NCR01143) as a Balancing Authority Dear Mr. Propes: By this letter, the North American Electric Reliability Corporation (NERC) confirms the certification of Southwest Power Pool (SPP) (NCR01143) as a NERC certified Balancing Authority (BA). In accordance with the NERC Rules of Procedure Section 500 “Organization Registration and Certification” a Reliability Coordinator (RC), BA, and Transmission Operator (TOP) are functional entities that are required to be evaluated and certified. Appendix 5A to the Rules of Procedure “Organization Registration and Certification Manual” (Manual) contains the procedures of the certification program used to evaluate and certify the competency of an entity to perform certain reliability functions. Section V of this Manual requires an entity to complete the certification process if that entity is to become NERC certified. In completing the certification process in reasonable accordance with the aforementioned rules, SERC Reliability Corporation (SERC) led a team in the evaluation of SPP’s ability to perform the function of a BA. This evaluation was based upon SPP having the necessary tools, processes, training, procedures, and personnel to operate reliably as a BA. After careful review of the results of this evaluation as described in the Final Report, posted on NERC’s website: SPP BA Certification Final Report, SPP has provided reasonable assurance that SPP can reliably operate as a BA. Therefore, based upon the recommendation of the Certification Team and the approval of SERC and Midwest Reliability Organization (MRO), NERC approves and confirms the certification of SPP as a BA. Included with this letter, as required by NERC Rules of Procedure, Section IV of Appendix 5A, Paragraph 21 is the certificate testifying to the certification of SPP as a BA. We appreciate the efforts of SPP in support of the Certification Team for this complete and thorough review to determine that SPP has sufficient capabilities to perform the tasks necessary as a NERC-certified BA.

mailto:[email protected]

http://www.nerc.com/pa/comp/Organization%20Certification%20DL/BA%20Certification%20of%20Southwest%20Power%20Pool.pdf

As a final reminder, per ROP Appendix 5A, if there are any changes to the basis of this certification, you are obligated to advise SERC and MRO as soon as practical. Sincerely,

Jack Wiseman Manager, Organization Registration and Certification North American Electric Reliability Corporation 3353 Peachtree Road NE Suite 600, North Tower Atlanta, GA 30326 [email protected] Cc: Cover letter only via email

Gerry Cauley, NERC Earl Shockley, NERC

Charles Berardesco, NERC Rebecca Michael, NERC Clyde Melton, NERC

Ryan Mauldin, NERC Chris Scheetz, NERC Scott Henry, SERC W. Todd Curl, SERC Andrea Koch, SERC Alan Pooser, SERC Sarah E. Stevens, SERC Fred Rains, SERC Daniel P. Skaar, MRO James D. Burley, MRO Russ W. Mountjoy, MRO Ron Ciesiel, SPP RE Lonnie Lindekugel, SPP RE Jeff Rooker, SPP RE Jim Williams, SPP RE Mark Hegerle, FERC Roger Morie, FERC Jonathan First, FERC Michael Bardee, FERC Edward Franks, FERC

mailto:[email protected]

NERC

Organization CertificationSouthwest Power Pool (SPP)

NCR01143

Jack Wiseman

Manager of Organization Registration & Certification

has satisfactorily completed all of the Organization Certification requirements in the NERC Rules of Procedure Section 500 and Appendix 5A

for certification as a Balancing Authority (BA)

Certification Approved by NERC on: February 14, 2014

Exhibit 2

NERC |SERC | SPP BA Final Report | February 6, 2014 1 of 9

NERC BA Certification Final Report Southwest Power Pool (SPP), NCR01143 Site Visit Conducted November 5-6, 2013 Final Report Date February 6, 2014

3353 Peachtree Road NE Suite 600, North Tower

Atlanta, GA 30326 404-446-2560 | www.nerc.com


Table of Contents Table of Contents ......................................................................................................................................................................... 2 Introduction ................................................................................................................................................................................. 3 Certification Team ....................................................................................................................................................................... 3 Objective and Scope .................................................................................................................................................................... 3 Overall Conclusion ....................................................................................................................................................................... 3 Certification Team Determinations ............................................................................................................................................. 4

Items that Required Completion ............................................................................................................................................. 4 Findings .................................................................................................................................................................................... 4

Positive Observations .................................................................................................................................................................. 4 Company History – Background .................................................................................................................................................. 4

Corporate ................................................................................................................................................................................. 4 SERC’s CMEP Relationship with SPP ........................................................................................................................................ 4 System Overview ..................................................................................................................................................................... 5

Company Details – Operating Facility .......................................................................................................................................... 5 Control Center/SCADA System Description ............................................................................................................................. 5

Documentation List ...................................................................................................................................................................... 5 Attachment 1 – Certification Team.............................................................................................................................................. 6

SERC Certification Team .......................................................................................................................................................... 6 SPP Personnel .......................................................................................................................................................................... 6

Attachment 2 – Certification Process Steps ................................................................................................................................. 8 Documentation Review ........................................................................................................................................................... 8 Applications Review ................................................................................................................................................................. 8

Attachment 3 – Items Required to be Completed for Operation ................................................................................................ 9


Introduction This report presents the results of the SERC Reliability Corporation led Certification Team’s (CT) efforts to endorse Southwest Power Pool (SPP) (NCR01143) as a Balancing Authority (BA) in the Southwest Power Pool Regional Entity (SPP RE) and Midwest Reliability Organization (MRO) areas of responsibility certified by the North American Electric Reliability Corporation (NERC). This Certification was due to the consolidation of 16 SPP area Balancing Authorities into a single Balancing Autority to be operated by SPP. The BA operates within the metered boundaries that establish the Balancing Authority Area. Every generator, transmission facility, and end-use customer is in a Balancing Authority Area. The BA‘s mission is to maintain the balance between loads and resources in real time within its BA Area by keeping its actual interchange equal to its scheduled interchange and meeting its frequency bias obligation. The load-resource balance is measured by the BA‘s Area Control Error (ACE). NERC’s Reliability Standards require that the Balancing Authority maintain its ACE within acceptable limits. Maintaining resource-demand balance within the Balancing Authority Area requires four types of resource management, all of which are the Balancing Authority’s responsibility:

• Frequency control through tie-line bias

• Regulation service deployment

• Load-following through economic dispatch

• Interchange implementation

Certification Team

Following notification of Southwest Power Pool’s request for Certification and Registration, which was received on August 9, 2012 as a BA, a CT was formed and a Certification evaluation date was selected to perform an on-site visit. The rosters for members of both the CT and the Southwest Power Pool participants are listed in Attachment 1.

Objective and Scope The objective of the CT evaluation was to assess Southwest Power Pool’s processes, procedures, tools, training, and personnel that allow it to perform the function of a BA. The scope of the evaluation included:

1. Interviewing Southwest Power Pool’s management and reviewing pertinent documentation for verification of basic requirements for BA operation;

2. Reviewing procedures and other documentation developed by Southwest Power Pool to meet the applicable Standards/Requirements;

3. Interviewing Southwest Power Pool system operations personnel;

4. Reviewing Southwest Power Pool’s primary capabilities, Energy Management System (EMS), communication facilities, operator displays, etc.; and

5. Performing other validation reviews as considered necessary.

An on-site review was held at the Southwest Power Pool’s primary Control Center (PCC) on November 5-6, 2013.

Overall Conclusion The Certification process was completed in reasonable accordance with the NERC Rules of Procedure (ROP) to determine if Southwest Power Pool has the necessary processes, procedures, tools, training, and personnel to perform the function as a NERC-certified BA. Southwest Power Pool presented evidence related to the applicable Standards/Requirements for the CT to review. Based on this evidentiary review, the CT has reasonable assurance that Southwest Power Pool has the processes, procedures, tools, training, and personnel in place to reliably perform the BA function.


Therefore, the CT recommends that SERC Reliability Corporation (SERC) and Midwest Reliability Organization (MRO) approve Certification of Southwest Power Pool as a NERC-certified BA, and forward such approval to NERC for final review and approval.

The CT found the Southwest Power Pool operators to be equipped with the necessary operating tools, and they are prepared to perform the BA operations. All of Southwest Power Pool’s operators are NERC-certified operators.

Certification Team Determinations The CT found that Southwest Power Pool is prepared and qualified to operate as a NERC-certified BA based on its review of the evidence presented by Southwest Power Pool. The CT recommends that Southwest Power Pool be certified by NERC to operate as a BA.

Items that Required Completion At the conclusion of the site visit, it was agreed that certain items required completion prior to the Certification of SPP as a BA; and a tentative schedule for completion was agreed upon. The list of these items is included as Attachment 3. As noted in Attachment 3, evidence of completion of these items was provided to the CT for review and confirmation. Each item was closed to the satisfaction of the CT prior to the issuance of this Final Report.

Findings No findings, which would prevent SPP from being certified as a NERC-certified BA, were identified by the CT as of the issuance of this Final Report.

Positive Observations The CT noted the following positive aspects that will enhance Southwest Power Pool’s performance as a BA:

1. Executive officers of the company attending the Certification presentations show support at the highest levels.

2. Continued unstructured testing to include the transition from Daylight Savings Time.

3. Outstanding situation awareness tools for BA Console. a. Unit dispatch delta bar graph b. Ability to drill down to substation single line from alarm page c. Pre-populating log book from the alarm page d. Ability to share log book entries with other consoles e. Tie Line Validation display

4. Majority of BA operators and supervision have BA experience.

Company History – Background Corporate In North America, Southwest Power Pool is one of nine Independent System Operators/Regional Transmission Organizations (ISOs/RTOs) and one of eight NERC Regional Entities. SPP is mandated by the Federal Energy Regulatory Commission to ensure reliable supplies of power, adequate transmission infrastructure, and competitive wholesale prices of electricity. ISOs/RTOs are the "air traffic controllers" of the electric power grid. ISOs/RTOs do not own the power grid; they independently operate the grid minute-by-minute to ensure that power gets to customers and to eliminate power shortages.

SERC’s CMEP Relationship with SPP When FERC conditionally approved the delegation agreements of the eight Regional Entities, it expressed concern over potential conflicts of interest in several of the Regional Entities affiliated with a Registered Entity; and directed NERC to remedy these independence concerns by either assuming the compliance oversight itself or to find alternative parties. In this way the Regional Entity that also had Registered Entity functions would not monitor compliance of its own Registered Entity functions.


As a result of this, the SERC-SPP Agreement was approved by FERC on July 12, 2010. This provided that SERC would act as Compliance Enforcement Authority for matters where SPP was also the Registered Entity. (Order Conditionally Accepting Compliance Monitoring and Enforcement Program Agreements and Revised Delegation Agreements, and Ordering Compliance Filing, 132FERC/61,024 Docket No. RR10-7-000, issued July 12, 2010)

System Overview The SPP BA is part of SPP’s move to an Integrated Marketplace model of resource management. The Integrated Marketplace includes establishing a Day-Ahead Market, Day-Ahead Reiliability Unit Commitment, Intra-Day Real-Time Unit Commitment, a Real-Time Balancing Market, and Market Settlement. The SPP BA consolidates the independent operation of 16 SPP area BAs into one consolidated Balancing Authority Area to implement these changes.

Company Details – Operating Facility Control Center/SCADA System Description The BA operations is located at SPP’s Chenal Operations Center in Little Rock, AR, and is staffed by 7 Balancing Coordinators (BC) who operate on a rotating schedule. These operators primarily utilize a Market Operations System (MOS) and Energy Management System (EMS), which includes RTGEN capability and Automatic Generation Control (AGC). These tools, and others, are utilized to monitor Operating, Regulating, and Contingency Reserves in multiple Reserve Zones. This information includes load forecasts from multiple providers, hourly expected wind output forecast, hourly total wind power forecast, and generation and transmission outage information supplied by a CROW system. The BC monitors the deployment of reserves; and works with the TOP, GOP, and LSE to resolve issues. The SPP BC also coordinates its current-day, next-day, and seasonal operations with its TOP; and participates in the planned outage coordination of transmission and generation equipment. During emergencies, the BC will coordinate with the TOP and RC to immediately take action to restore Real and Reactive Power balance.

Documentation List Copies of all of the supporting SPP documents were collected as evidence of SPP’s preparedness, and will be kept as a record of evidence to support the CT’s recommendation. These documents will be retained at the SERC offices in Charlotte, NC for a period of six (6) years.

None of the documents listed below are included with the distribution of this Final Report. Per the NERC Rules of Procedure, and due to the confidential nature of this material, these documents are available for review at the SERC offices after proper authorization is obtained through SERC and NERC:

• SPP BA Questionnaire

• SPP BA Master Matrix

• SPP’s various BA evidence files

• Presentations made by the CT and SPP

• Internal Compliance Program and Internal Controls Documentation


Attachment 1 – Certification Team SERC Certification Team

Table 1: BA Certification Team

Name Position Organization

Fred Rains Lead SERC Reliability Corporation

Mike Kuhl Member SERC Reliability Corporation

Lonnie Ratliff Member SERC Reliability Corporation

Steve Corbin Member SERC Reliability Corporation

Jeff Rooker Observer SPP RE

Jim Williams Observer SPP RE

Mike Cruz-Montes Member CenterPoint Energy

Chris Wakefield Member Southern Company

David Dockery Member Associated Electric Cooperative, Inc.

Russ Mountjoy Member MRO

Ryan Mauldin Member NERC

Denise Hunter Member NERC

SPP Personnel

Table 2: SPP Personnel Participants

Name Position

Philip Propes Director, Compliance

C.J. Brown Manager, System Operations - Systems Operations

Carl Stelly Manager, Balancing Authority Administration

Jimmy Womack Manager, Operations Analysis and Performance Support

Sherry Farrow Senior Performance Support Trainer - Operations Analysis & Performance Support

Darrell Anthony Shift Supervisor - Systems Operations

Glenn Bethea Senior Balancing Coordinator - Systems Operations

Jim Price Senior Balancing Coordinator - Systems Operations

Lesley Bingham Senior Security Analyst

Jason Smith Manager, Operations Analysis and Engineering Support

Will Tootle Supervisor, Operational Planning - Operational Planning

Robert Garcia Lead Network/Telecom Security Administrator


Ryan McCon Lead Network /Telecom Security Administrator

Chris Karmales Engineer II - Tariff Administration & AFC Support EIT Program

Scott Jordan Lead Engineer - Transmission Engineering & Modeling

Shari Brown Manager, Tariff and Administration

Lonnie Lindekugel Lead Compliance Analyst BA/IM

Mark Robinson Lead Compliance Analyst, Operations

Jonathan Hayes Senior Compliance Analyst Engineering

Alison Hayes Senior Compliance Analyst/Tariff and Criteria

Melissa Rinehart Compliance Analyst II

Kim Van Brimer Compliance Outreach Coordinator

Kevin Molder Security Analyst II

Keith Dover Technical Documentation Specialist II


Attachment 2 – Certification Process Steps Documentation Review Using professional judgment, the CT reviewed the BA Questionnaire, the BA Master Matrix, and requested documents to determine the submitted documentation provided assurance that SPP has the processes, procedures, tools, training, and personnel to operate as a NERC-certified BA. The BA Master Matrix is a spreadsheet created using the VRF Matrix available on NERC’s website under the Standards link and eliminating all functions other than the BA function. Using the BA Master Matrix spreadsheet, the CT cataloged the documentation evidence provided by SPP. The spreadsheet contains all the applicable NERC Standards and associated Requirements for an entity to be evaluated as a NERC-certified BA. In the Certification Process, the CT inserted the appropriate SPP document references in which evidence provided by SPP met the applicable Standards and Requirements.

Applications Review The on-site visit focused on reviewing documentation, evaluating control centers’ configurations, interviewing of SPP’s operators, and evaluating the BA EMS and MOS applications and operator toolsets that SPP has available for its operators.


Attachment 3 – Items Required to be Completed for Operation All items listed below requiring completion prior to the certification of SPP as a BA were closed to the satisfaction of the CT prior to the issuance of this Final Report.

1. Evidence of completion of AGC dispatch testing 2. Syllabus and training records to validate BC training, including protection system knowledge and job tasks 3. Finalized copy of SPP BA EOP 100313 4. Two examples of Mitigation Plans (Op Guides) 5. Finalized copy of a BA – BA First Tier non-RSG Neighbor Coordination agreement

CERTIFICATE OF SERVICE

I hereby certify that I have this day served the foregoing document upon each person

designated on the official service list compiled by the Secretary in this proceeding.

Dated at Little Rock, Arkansas, this 18th day of February, 2014.

/s/ Michelle Harris Michelle Harris

Documents

Southwest Power Pool (SPP)