COMMISSION BRIEFING SLIDES/EXHIBITS

JOINT MEETING WITH FERC ON GRID RELIABILITY

JANUARY 24, 2007
I__

7

Grid Reliability Update

Joint FERC/NRC Meeting

Patrick L. Hiland, Director

Division of Engineering

Office of Nuclear Reactor Regulation

Michael E. Mayfield, Director

Division of.Engineering

Office of New Reactors

January 23, 2007

1
Overview

* Progress since April 2006 joint

" Progress since April 2006 joint

Commission meeting

* Summer 2007 readiness assessment

- New reactors

2
.~'4P~I' REGU4

.4/ ~d. 0

01

0

April 24, 2006

Follow-up

1. Provide loss of offsite power data to FERC

2. Interact with stakeholders

impact of new generating

regarding the safety

capacity

3. Provide information on NRC training and

processes

4. Obtain a better understanding of OASIS

5. Schedule a joint Commission meeting

3
S

Summer 2007 Readiness

Nuclear power plants are prepared to address

changes in grid reliability

NRC has improved oversight

" Assessing responses to Generic Letter 2006-02

* Enhancing routine inspections

" Improved monitoring of grid status

4
Z Beyond Summer 2007

• Continue to work closely with stakeholders

* Resolve differences in Station Blackout

Rule interpretation

o Learn from the operating experience

review

5
NPPs and COL Application Sites

NPP: Nuclear Power Plant 6
0

Parallel Review Process

Customer Application

To Transmission Provider

Grid Stability and

Reliabilit fo ation

Customer and Transmission provider Agreement and

FERC Approval

Plant Construction Process

7
ft REG(j

/List of Acronyms

* COL - Combined Operating License

* FERC - Federal Energy Regulatory Commission

* ERO - Electric Reliability Organization

" ISO - Independent System Operator

" NERC - North American Electric Reliability Corporation

" NRC - Nuclear Regulatory Commission

" OASIS - Open Access Same time Information System

" TSO - Transmission System Operator

8
Joint Meeting of the

Nuclear Regulatory

and Federal Energy

Commission

January 23, 2007

Commission

Regulatory

Joseph H. McClelland

Director, Division of Reliability

Energy Markets and Reliability

1
The Energy Policy Act of 2005 ( •

" Provided FERC with substantial new authority over

the reliability of the Bulk Power System

* Certification of an ERO and approval of mandatory

standards for all users, owners, and operators of

he Bulk Power System

" The Commission can approve a proposed standard

or remand a standard to the ERO or Regional Entity

" The Commission must give "due weight" to the

technical expertise of the ERO

" Excludes local distribution and does not authorize the

Commission to order the construction of new facilities

2
Order 672 - Rules for the (

ERO and Standards

" Order 672 was issued on 2/3/06

" Encourages the ERO to seek international recognitior

in Canada and Mexico

" Establishes the responsibilities of the ERO as well as

its ability to delegate some duties to Regional Entities

" Affirms that regional variations to the reliability

standards are permitted in some circumstances

" Affirms the Commission's ability to independently

conduct investigations and enforcement actions

" Establishes guidelines for the determination and

application of penalties for violations of approved

reliability standards

1

3
Electric Reliability Organization I

and Reliability Standards d

" On 4/4/06, NERC filed its application to

become the ERO and its reliability standards

with the Commission for review/approval

" Staff released a preliminary assessment

of the standards on 5/11/06

* Comments were solicited through June

and a technical conference held in July

* The assessment and comments were used

to help draft the NOPR for the Standards

4
Electric Reliability Organization ,•

and Reliability Standards

" On 7/20/06, the Commission certified NERC

as the ERO

" On 8/28/06, NERC filed its CIP standards

for Commission review and approval

" On 10/19/06, the Commission approved

NERC's 2007 Business Plan and Budget

.as the ERO

5
Electric Reliability Organization I

and Reliability Standards

Also on 10/19/06, the Commission issued the

Reliability Standards NOPR

- The NOPR proposes to approve 83 of 107 standards

- The NOPR calls for modifications to 62 of 83 of the standards

- The NOPR sets aside 24 of the 107 standards pending the

receipt of additional information

- The NOPR proposes to direct the ERO to develop a work plan

* To-date, 128 comments comprising approximately

2,100 pages have been received by the Commission

6
Electric Reliability Organization

and Reliability Standards

" On 11/29/06, NERC filed its Delegation Agreements and

the Compliance Monitoring and Enforcement Program

" To date, over 140 comments comprising over 1,000

pages have been filed

• On 12/11/06, the Commission issued a preliminary

staff assessment on NERC's CIP Standards

" Comments are due on the CIP standards staff

assessment by 2/12/07

• The goal is to have mandatory and enforceable

reliability standards by the summer of 2007

7
Grid Reliability

Federal Energy Regulatory Commission

and Nuclear Regulatory Commission

January 23, 2007

NERC

NORTH AMERICAN ELECTRIC

-1- RELIASILITY CORPORATION
r

Key Initiatives

*Transmission needs for new nuclear units

* Implementing blackout recommendations

* Off-site power reliability standard

*Coordination with NRC

NErPC

NORTH AMERICAN ELECTRIC

RELIABILITY CORPORATION

-2-
Transmission Needs

* Need thorough studies - Can't just "plug and

play"

* Transmission lagging demand and capacity

growth

e Increased congestion effects

" Supply adequacy

* Energy security

" Economy

* Transmission planning horizon

but takes longer to permit

* Big question is "who pays?"

5 years or less,

N"E __C

NORTH AMEIRICAN ELECTRIC

-3- RELIAI~iLITY CORIPor[ATiON
Implementing Blackout Recommendations

* New standards

* Vegetation outage reporting

* Compliance enforcement

* Readiness evaluations

* Operator training

* Protective relay reviews

* System modeling

NORFTH AMEFRICAN ELECTRIC

RELIABILITY CORPORATiON

-4-
Offsite Power Reliability Standards

" Coordination between nuclear plant and

transmission operators

* Ensure safe operation and shutdown

" Ballot in April

" Board approval in May

* Implementation 18 months after FERC

approval

NEPC

NORTH AMERICAN ELECTRIC

-5- RELIABILITY Cor OR ATION
Coordination with NRC

* NRC-N ERC MOA

* Basic agreement signed August 2004

* Coordination plans signed in May 2005

* Communication during emergencies

* Event analyses

" Exchange of operational experience

* Participation in NERC committees

NEIC

NOR•TH AMERICAN ELECTRIC

RELIABILITY C ORPORATION -U-
Grid Reliability

Federal Energy Regulatory Commission

and Nuclear Regulatory Commission

January 23, 2007

NERC

NORTH AMEIRICAN ELECTRIC

-7- ~RELIABILITY COIRPORATION
DOE Implementation of EPACT

Transmission Provisions

January 23 2007

Office of Electricity Delivery

and Energy Reliability (OE)

US Department of Energy

U.S. DeatetfEeg - 1000 Indpenenc -A-eS Wahntn . DC 2585
The DOE Congestion Study

" Published August 8, 2006;

* Identified 3 categories of congestion areas:

critical, area of concern, and conditional;

* Requested comments by Oct. 10;

" DOE now evaluating comments. Secretary may

propose draft "national interest electric

transmission corridors;"

" Any draft designation will be followed by a

comment period and a possible report and final

designation.

Office of Electricity Delivery and Energy Reliability
Critical Congestion Areas and

Congestion Areas of Concern

SlCrit ical Congestbon Area 7

Direction of increased flows f e + needed to reduce congestion

in Critical Congestion Area

SDirection of increased flows

needed to reduce congestion 1 Portlandin Congestion Area of Concern

Critical Congestion Area

Direction of increased flows ! needed to reduce congestion

in ritical Congestion Area Detro

Direction of increased flows Cleveland Ftsburght

needed to reduce congestion Ball

Sanin Congestion Area of C oncen Cincinnati M

San Francisco Co S cront

Office of Electricity Delivery and Energy Reliability
Conditional Congestion Areas

GiM ILSAA8

W]IND

RPotential resource concentration

* Likely direction of electricity flows

from resources to loads

Note: Renewables include wind, solar, and geothermal.

Office of Electricity Delivery and Energy Reliability
Transmission and

New Nuclear Units

• The introduction of new nuclear generation facilities

will have profound impacts on the grid;

* Developers should begin dialogue with OE and

regional transmission planners;

" Transmission planning, review, and construction

must be done in parallel with that for nuclear units. J

Office of Electricity Delivery and Energy Reliability