COMMENTS OF THE INTERVENOR NEWFOUNDLAND AND LABRADOR HYDRO REGARDING FOLLOW-UP OF DECISIONS D-2011-068 AND D-2012-091 WITH RESPECT TO THE REQUEST BY HYDRO-QUÉBEC CONTRÔLE DU MOUVEMENT DES ÉNERGIES TO ADOPT RELIABILITY STANDARDS FILE R-3699-2009 - PHASE 1 Presented to the Régie de l’énergie du Québec Montréal, Québec January 14, 2013 DM_MTL/900002.00001/2955770.1 Page 2 TABLE OF CONTENTS 1. INTRODUCTION ................................................................................................. 3 2. GENERAL COMMENTS ..................................................................................... 3 3. SPECIFIC COMMENTS ON NOVEMBER 2, 2012 FILING BY HQRC .......... 4 4. 5. (a) Québec’s Appendix to BAL-003-0.1b ............................................................. 4 (b) Québec’s Appendices to Standards TPL-001 to TPL-004 ............................. 7 (c) Québec’s Appendix to Standard VAR-002 .................................................. 10 SPECIFIC COMMENTS ON NOVEMBER 30, 2012 FILING BY HQRC ...... 11 (a) PRC-001: ....................................................................................................... 11 (b) EOP-004: ....................................................................................................... 12 SPECIFIC COMMENTS ON DECEMBER 7, 2012 FILING BY HQRC: ....... 14 (a) Glossary ......................................................................................................... 14 (b) FAC-010-2.1, and FAC-014-2 ....................................................................... 14 6. SPECIFIC COMMENTS ON DECEMBER 14, 2012 FILING BY HQRC ...... 15 7. CONCLUSION .................................................................................................... 15 DM_MTL/900002.00001/2955770.1 Page 3 1. INTRODUCTION Newfoundland and Labrador Hydro (“NLH”) as the purchaser of Transmission Service from Hydro-Québec (“HQT”) and its parent company Nalcor (“Nalcor”) wishes to pass comment on the Reliability Standards recently filed by the HQ Reliability Coordinator (“HQRC”) and submitted to the Régie de l’énergie (“Régie”) on November 2, 2012, November 30, 2012, December 7, 2012 and on December 14, 2012. NLH’s comments are in some cases general and apply to numerous Standards, while in other instances they are directed at a given Standard. 2. GENERAL COMMENTS NLH submits these comments following the Régie’s decision which invokes the necessity of clarity in the codification of the Appendices. In the most recent decisions, the Régie specifically mentions that the Québec specificities need to be clearly codified into the normative documents. As it appears from decision D-2012-091 of July 25, 2012: [56] La Régie est d’avis que, considérant les spécificités introduites par le Coordonnateur en matière d’application des normes au Québec, le champ d’application spécifique au Québec doit, le cas échéant, être clairement codifié dans les documents normatifs. Par ailleurs, elle est d’avis que cette codification ne peut être systématisée par une règle générique unique, mais doit tenir compte de la teneur des exigences des normes. The Régie clearly mentioned the guidelines for HQRC to follow when developing the Appendices to the Reliability Standards, as it appears from decision D-2011-068. of May 13, 2011: [129] La Régie demande au Coordonnateur de suivre les lignes directrices suivantes lors de l’élaboration des normes de fiabilité. [130] L’annexe de chaque norme de fiabilité doit préciser : la norme NERC à laquelle l’annexe est associée; la date d’adoption, par la Régie, de la norme NERC associée; la date d’adoption, par la Régie, de l’annexe; la date de mise en vigueur de la norme NERC et de son annexe, conformément aux décisions de la Régie; que la Régie est responsable, au Québec, de la vérification de la conformité aux normes de fiabilité et à leur annexe qu’elle adopte; DM_MTL/900002.00001/2955770.1 Page 4 le cas échéant, l’historique des versions d’origine et révisions subséquentes de l’annexe ainsi que leur date d’adoption par la Régie. As a result, when filing any standards, appendices or associated requests, HQRC must clearly meet the Régie’s requirements in order to have its filing approved by the Régie. 3. SPECIFIC COMMENTS ON NOVEMBER 2, 2012 FILING BY HQRC (a) Québec’s Appendix to BAL-003-0.1b HQRC’s submission of its Québec specific Appendix for Standard BAL-003 recommends that neither Requirement R4 nor R6 of the Standard be applicable in Québec. In each case, NLH believes that the Régie should consider the following when assessing the Appendix; It appears as though HQRC is attempting to justify the removal of a Requirement in a Standard by stating that the condition to be approved does not presently exist. NLH believes the applicability of a Requirement within a Standard is best assessed when the Standard is being applied. HQRC’s rationale inappropriately applies assessment decisions that should be made during the application of a Standard to the process of Standard adoption1. Neither of the explanations provided is satisfactory in that neither addresses all the Requirements contained in the specified sections. NLH believes it is not ‘necessary’ to remove Requirements R4 and R6 from the Standard simply because the HQRC claims that the activity mentioned in the Standard has not yet been undertaken, particularly when this claim is being made by a division of a company whose related entities will be subject to the Standard. The ‘Agreement on the Development of Electric Power Transmission Reliability Standards and of Procedures and a Program for the Monitoring of the Application of the Standards for Québec’, at 4.2 states: ‘NERC and NPCC undertake to ascertain that any electric power transmission reliability standards specific to Québec, and/or any variant of such standards specific to Québec, which the reliability coordinator deems necessary to ensure DM_MTL/900002.00001/2955770.1 Page 5 the reliability of electric power transmission in Québec, is as stringent as the NERC reliability standards applicable in the rest of North America’2. It is NLH’s view that the existing approval process is not intended to examine the present activities of the entities to determine if a Requirement of the Standard is applicable. Instead the process is intended to approve, and modify where and when required, the NERC Standards submitted, taking into consideration the ‘uniqueness of the Québec electrical system and it is not intended to produce variants to the Standards based on practices which can be performed optionally, and not ruled out specifically as a result of the system’s uniqueness. The ‘Agreement on the Development of Electric Power Transmission Reliability Standards and of Procedures and of a Program for the Monitoring of the Application of the Standards for Québec’ states: ‘Whereas the Québec electric power transmission system is an asynchronous interconnection and NERC and NPCC have recognized it as an Interconnection, it may, therefore, require reliability standards or variants of such standards specific to this Interconnection’3. The Standard, as written by NERC, permits the suitability and usefulness of Requirements R4 and R6 to be assessed at the time the Standard is applied (the time of application is prescribed in the Standard), or at the time of audit. The present need, or lack thereof, for a Requirement is not indicative of the future need for such a Requirement. As a result, if the Appendix is approved as presently submitted by HQRC, the Standard may not contain all the checks needed to support the purpose of the Standard if practices change. NLH believes that the suggested removal of Requirements R4 and R6 will make the Standard less stringent, particularly given that NLH is unaware of the presence of a procedure that would require the reinsertion of R4 and R6 into Québec’s Appendix before the Balancing Authority is permitted to accept energy from jointly owned units or to perform Supplemental Regulation Services, both of which activities can affect the purpose of the Standard. Removing the Requirement from the Standard at the time of its adoption removes the opportunity for auditing the activity in the event such a situation arises. 2 3 Agreement on the Development of Electric Power Transmission Reliability Standards and of Procedures and a Program for the Monitoring of the Application of the Standards for Québec, signed May 8, 2009. Id. DM_MTL/900002.00001/2955770.1 Page 6 The processing of these sections of the Standard on January 1st of each year, as written by NERC, does not appear burdensome. Requirement R4 In the Appendices to BAL-003, HQRC states: ‘No jointly owned units in Québec’ as justification for the non-applicability of both sub-Requirements R4.1 and R4.2 of the Standard. NLH believes the explanation is unsatisfactory in that it does not address all Requirements contained in the subsections of R4. Requirement R4, in addition to recognising fixed schedule deliveries from jointly owned units ‘within’ Balancing Area of Québec, as per R4.1, also requires the Balancing Authority to reflect, in its Frequency Bias Setting, deliveries from Jointly Owned Units ‘Outside’ its Balancing Authority Area, as per sub-Requirement R4.2. HQRC’s justification fails to address R4.2. NLH believes that this omission should be rectified so as to eliminate ambiguity. Finally, in order for HQRC’s justification to adequately address the requirements of R4.1, and to do so in a clear manner, NLH proposes that HQRC use language consistent with the terminology of the Standard. Thus, HQRC could express its reasoning for the exemption of R4.1 by stating: ‘No jointly owned units ‘within’ Quebec Balancing Authority Area’. Requirement R6 NLH has similar comments with respect to R6. NLH would like to see a more thorough explanation as to why HQRC believes Requirement R6 is not applicable in Québec. HQRC has reasoned that Requirement R6 is not applicable to Balancing Authorities in Québec because, ‘Overlap Regulation Service is not used in Québec’, however this explanation addresses only one of the regulation services mentioned in the Requirement and does not address the requirement associated with supplemental regulation. Requirement R6 speaks to both Overlap Regulation Service and to Supplemental Regulation Service and does so with the Requirement for the Balancing Authority to adjust its Frequency Bias Setting if the Balancing Authority is involved in either form of regulation service. DM_MTL/900002.00001/2955770.1 Page 7 HQRC’s justification, which states ‘Overlap Regulation Service is not used in Québec’ does not address the Supplemental Regulation Services Requirement of section R6 of the Standard. NLH believes that this omission should be rectified so as to eliminate ambiguity and that such an justification should use terminology consistent with the requirements, i.e. it should incorporate the term ‘Balancing Authority’. That being said, and as stated initially, the applicability of either Requirement R4 or R6 should be determined on January 1st of each year, as required by the Standard, or during an audit, and should not be ruled out during the Standard adoption process. (b) Québec’s Appendices to Standards TPL-001 to TPL-004 The HQRC Appendices to NERC Standards TPL-001 to TPL-004 identify the scope of the Standards to be the BPS. NLH, as a purchaser of transmission services, is concerned that the scope of these Standards may produce a list of contingencies and critical elements different than those applied to other related groups of Standards such as FAC010, FAC-011 and the MOD group of Standards (which have not yet been submitted) thus establishing different lists of contingencies for planning purposes (TPL), system operating limits (FAC) and ATC calculations (MOD). This concern is manifested from a joint assessment of the TPL and FAC standards submitted. The following wording illustrates the ambiguity that can develop when interpreting the standards jointly and also the ambiguity that exists within the FAC standards. The assessment is based on the interpretation of the following 3 references from the standards presented. 1) Standards TPL-001 to TPL-004, in accordance with section 6 of the related QC specific appendix identifies the scope of the standards to be the BPS. From the scope statement it appears that Table 1 of the Standards which lists contingencies (ie single line to ground fault), is speaking of contingencies on BPS elements. 2) Standard FAC-010, in accordance with section 6 of its QC specific appendix identifies the scope of the standard as the MTS. 3) Requirement R2.2.1 of FAC-010 speaks to a single line to ground fault without specifically identifying the classification of the fault (BES, BPS,MTS). The text reference made to a single line to ground fault in R2.2.1 of FAC-010 has the potential to be interpreted 3 ways: DM_MTL/900002.00001/2955770.1 Page 8 1) The line to ground fault reference in R2.2.1 could be a reference to a BES element given that section B of the QC specific appendix for FAC-010 uses the phrase 'No Specific Provision' thus indicating that the standard should be interpreted as written by NERC, thus applicable to NERC's BES definition. 2) The line to ground fault could be a reference to an MTS element given that the scope of the FAC standard is identified as MTS in the QC specific appendix (the two example above identify ambiguity within the standard). 3) The line to ground fault in question could be related to a BPS element given that the TPL Standards, which in Table 1 identifies system contingencies, contains in section 6 of the QC appendix a statement identifying the BPS as the proper scope for the TPL standards. This third example illustrates ambiguity between the TPL standards and both of the FAC interpretations above. NLH is concerned with what it perceives as inconsistency and ambiguity within the FAC standards and additional ambiguity and inconsistency between the FAC and TPL standards. The illustration above is one example of the difficulty associated with identifying the proper list of contingent elements and ensuring that the list is consistent throughout and between standards. NLH’s concern with respect to the use of different contingency lists between these two groups of Standards is consistent with the concerns expressed by FERC. In Order 705 FERC has said: 47. Further, the Commission is persuaded by NERC’s comments that it will coordinate the assumptions and conditions considered in system planning under the TPL Reliability Standards, SOL determination under the FAC Reliability Standards and TTC calculation under the MOD Reliability Standards. At the time the above order, 705 was issued, the MOD Standards related to TTC and ATC had not yet been submitted to FERC, a situation not unlike that before the Régie given that Standards MOD-028 to MOD-030 have not been submitted for approval in Québec. However FERC was cognisant of intent and content of these MOD Standards and in that same ruling made the following determinations 48. At this time, the Commission disagrees with the commenters that argue that there is a potential for undue discrimination in the FAC Reliability Standards. The Commission raised the question regarding the application of the SOL methodology in the FAC Reliability Standards compared with the calculation of ATC. However, NERC has not at this time filed the Reliability Standards DM_MTL/900002.00001/2955770.1 Page 9 concerning TTC and ATC calculation. The Commission notes that it has previously provided directives concerning the need for coordination and consistency among short- and long-term ATC calculations, operations planning and system expansion determinations. The Commission agrees with commenters that the directives concerning consistency in Order Nos. 693 and 890 should alleviate concerns about the potential for undue discrimination. These directives are currently being addressed by NERC in Reliability Standards under development. We will not change those directives in this proceeding. When NERC files revised MOD Reliability Standards for calculating ATC or TTC, the Commission will review the resulting Reliability Standards for compliance with our directives in Order Nos. 890 and 693 concerning consistency for SOLs, transfer capability and TTC. 49. Because the TPL series of Reliability Standards sets the foundation for the types of contingencies to be considered to meet Requirements in the FAC Reliability Standards, and the FAC Reliability Standards are intended to be consistent with the set of contingencies identified in the TPL Reliability Standards, the Commission would be concerned if the TPL Reliability Standards use one set of contingencies to plan the system, while the FAC Reliability Standards generate another set to calculate SOLs in the planning horizon. As NERC acknowledges, as the TPL series of Reliability Standards is modified, conforming changes to the corresponding lists of contingencies in the FAC or MOD series of Reliability Standards are expected to be necessary to ensure consistency in the list of contingencies. Similarly, the Commission believes that as FAC or MOD Reliability Standards are updated, the TPL series of Reliability Standards must be updated to remain consistent. Therefore, we direct that any revised TPL Reliability Standards must reflect consistency in the lists of contingencies between the two Reliability Standards. Should NERC file such revised TPL Reliability Standards, the Commission will review the resulting Reliability Standards for compliance with our directives in Order Nos. 890 and 693 concerning consistency for SOLs, transfer capability and TTC4. FERC's intentions related to the application of contingencies amongst the related TPL, FAC and MOD Standards were manifested in Requirements R6 and R7 of Standard MOD-001 that was yet to be presented to the Régie. R6. When calculating Total Transfer Capability (TTC) or Total Flowgate Capability (TFC) the Transmission Operator shall use assumptions no more limiting than those used in the planning of operations for the corresponding time period studied, providing such planning of operations has been performed for that 4 Order 705 FERC, 121 FERC ¶ 61,296, Facilities Design, Connections and Maintenance Reliability Standards, Issued December 27, 2007. DM_MTL/900002.00001/2955770.1 Page 10 time period. [Violation Risk Factor: Lower] [Time Horizon: Operations Planning] R7. When calculating ATC or AFC the Transmission Service Provider shall use assumptions no more limiting than those used in the planning of operations for the corresponding time period studied, providing such planning of operations has been performed for that time period. [Violation Risk Factor: Lower] [Time Horizon: Operations Planning] In a similar vein, Requirement R3 of the yet to be submitted MOD-029 links that Standard to the FAC Standards when it says; R3. Each Transmission Operator shall establish the TTC at the lesser of the value calculated in R2 or any System Operating Limit (SOL) for that ATC Path. [Violation Risk Factor: Lower] [Time Horizon: Operations Planning] NLH believes that it is appropriate for HQRC to justify the need for establishing differences in scope between the TPL and FAC Standards (and potentially the related MOD Standards). This justification can be accomplished through either a technical session or in a hearing. In addition the potential for ambiguity within the Standard, as evidenced between the Québec specific Scope and Requirement R2.1 of FAC-010, should be eliminated. (c) Québec’s Appendix to Standard VAR-002 HQRC's Appendix to Standard VAR-002 states that Requirements R4 and R5 are not applicable in Québec. NLH Requests an explanation for that position. R4 requires the generator to provide to the transmission operator and planner, information related to the transformers which connect the generator to the system. This data permits the operator to model, and subsequently to study, the system, particularly in relation to voltage stability. R5 requires the generator owner to modify its transformer tap settings at the request of the transmission operator, based on the studies and simulations performed by the transmission operator. Given that properly conducted system voltage studies require the data mentioned in the Requirement and that the transmission operator cannot ensure proper system performance unless he has the authority to modify transformer tap settings, NLH believes an explanation which justifies the omission of these Requirements in Québec should accompany HQRC’s submission. DM_MTL/900002.00001/2955770.1 Page 11 That explanation, while it may be as simple as a statement which indicates that the transformers in question are all owned by HQT and not the generator owner, should be submitted by HQRC for review by the stakeholders and the approval of the Régie. The Régie’s approval of the Appendix to Standard VAR-002 should be withheld until justifications for the omission of Requirements R4 and R5 are provided. 4. SPECIFIC COMMENTS ON NOVEMBER 30, 2012 FILING BY HQRC (a) PRC-001: In our comments filed October 31, 2012, we specifically mentioned, regarding this particular Standard, that: ‘The HQRC Appendix to standard PRC-001, in subsection A.6, titled “Scope”, indicates that the scope of the standard is the Main Transmission System (MTS) or any element of a regional system whose protection trips an element of the MTS. The Glossary of Terms accompanying the HQRC standards does not contain a definition for the term “regional system”. In an effort to provide clarity with respect to interpretation of the standard and the identification of to whom the standards apply, NLH believes that the term “regional system” should be defined, prior to approval of the standard, for inclusion in the Glossary of Terms used in the standards. NLH requests that the definition be sufficiently clear for the reader to differentiate a “regional system” from; “local system” or “local area”, the MTS the entirety of a “Balancing Area” or the collective systems of a Regional Entity. As was the case with the use of the phrase BPS, NLH is concerned with the possible ambiguity or the subjective use of an undefined term’. We note, in HQRC’s November 30, 2012 filing, that it has modified the Québec Appendix on the Scope (A.6.) deleting the following reference ‘or any element of a regional system whose protection trips an element of the MTS’. This section now reads as follows: DM_MTL/900002.00001/2955770.1 Page 12 6. Scope: Main Transmission System (MTS) Concerning these modifications, for the record, NLH wishes to mention that it has taken note of the changes and we will ask HQRC to explain it at the technical session. (b) EOP-004: In our comments on Standard EOP-004 filed October 31, 2012, we specifically cited FERC’s Order No. 693, paragraph 604, which adjudicates the approval of most of NERC’s Standards, including EOP-004. We specifically mentioned, regarding this particular Standard, that: The HQRC Appendix submitted to clarify the application of this Standard in Québec recommend, through modifications to Requirements R1 and Applicability A4.6, that the RRO not be responsible for establishing and maintaining a reporting procedure for Disturbances. General concerns linked to HQRC’s removal of the RRO’s role were expressed in those comments, as it appears from Section 1 a) of the document submitted on October 31, 2012. That document also mentions that: The HQRC Appendix to this Standard, through the abolishment of the above and Measure M1, recommends that a procedure not be available to appropriate stakeholders. Similarly, the abolishment of Requirement R5, recommends that the RRO will not be required to track the status of any recommendations which may result from these reports, nor be required to notify various NERC committees on the progress associated with the implementation of the recommendations. NLH, as a holder of a Transmission Service Agreement with HQ, is subject to delivery Curtailment and interruptions during those periods when Disturbances require that load relief be applied to the Transmission System. As a consequence NLH believes that a written procedure to guide the analysis and to establish content requirements, developed in accordance with industry practices, be made available to HQRC customers so that transmission customers can verify the reason for the curtailments. As DM_MTL/900002.00001/2955770.1 Page 13 mentioned earlier, NPCC is recognised by the Régie, HQRC and NERC as the RRO for Québec. In May 2009 the Régie, NERC and NPCC entered into an agreement titled “Agreement on the development of electric power transmission reliability standards and of procedures and a program for the monitoring of the application of these standards for Québec”. Section 4.2 of that agreement states: […] In brief, NLH concluded that: NLH believes that the change proposed to the standard should be demonstrated as a change needed to ensure reliable operation of the electric power system in Québec and that such changes ensure the standard is as stringent as that applicable in the rest of North America. We note, in HQRC’s November 30, 2012 filing, that it has modified the Québec Appendix, deleting the following reference ‘or any element of a regional system whose protection trips an element of the MTS’ from the Scope section that now reads as follow: 1.3. Data Retention The first paragraph is not applicable in Québec. Concerning these modifications, NLH is requesting that the Régie identify the entity that will carry out NPCC’s role for that requirement in Québec? NLH asks the Régie to review the comments that was made on October 31, 2012 on the role of RRO and NPCC. For the record, NLH wishes to mention that it has noticed the changes and may revert to this question in the future. DM_MTL/900002.00001/2955770.1 Page 14 5. SPECIFIC COMMENTS ON DECEMBER 7, 2012 FILING BY HQRC: (a) Glossary In its letter dated December 7, 2012, HQRC mentioned that the final version of the Glossary is the version filed on June 8, 2012. In this regard, NLH specifically mentioned in its comments of October 31, 2012 that it requested that the Glossary be revised and updated to incorporate the new terms for which approval is requested, such as : ‘Local Area’, ‘Québec Interconnection’ and ‘Regional System’. NLH took note that the expression ‘regional system’ has been deleted from Scope (EOP004 Appendix). Unless that expression is not used elsewhere in the Standards collectively, NLH reiterates its request for a definition for the expression. (b) FAC-010-2.1, and FAC-014-2 In its December 7, 2012 filing, HQRC submitted new versions of the following Standards CIP-001-2a, FAC-002-1, FAC-010-2.1, and FAC-014-2 that had been filed on June 11, 2012. In NLH’s January 27, 2012 comments relating to the HQRC’s proposed modifications for filing in June 2012, NLH made specific comments on Standards FAC-010-2.1, and FAC-014-2. NLH has since taken note that the majority of those comments were not integrated into the June 2012, as filed. On December 7, 2012, HQRC made certain modifications to the aforementioned Standards, which modifications do not, however, address NLH’s initial recommendations of January 27, 2012: NLH recognize that the Scope was added but that the other concerns were not addressed. We ask the Régie to review NLH’s comments made in previous submissions. NLH will want to have receive exact explanations in this regard at the technical session. DM_MTL/900002.00001/2955770.1 Page 15 6. SPECIFIC COMMENTS ON DECEMBER 14, 2012 FILING BY HQRC NLH requests that HQRC justify the changes requested to those Standards (part of the 95 Standards already filed). 7. CONCLUSION As mentioned in the general comments, NLH submits these comments in the interest of consistency and clarity, with respect to individual Standards and to related groups of Standards for which the application of one cannot be divorced from the application of another. NLH looks forward to participating in public sessions related to the Standards and hopes to be able to pass comment on the comprehensive collection once all the Standards have been presented. NLH believes it is incumbent upon HQRC to provide, for the consideration of the Régie and other stakeholders, the rationale for the to the Quebec specific changes proposed to the NERC Standards. NLH expects this rationale to include a description of HQ's planning and operating procedures and practices. The explanation should identify how these planning and operating procedures and practices are born from the uniqueness of the HQ’s system and how it is that the NERC standards as written by NERC cannot apply to the HQ system without the modifications proposed by in the HQRC specific Appendices. Moreover, NLH wishes to draw the Régie’s attention to the importance that should be attributed to the comments that have been formulated throughout the consultation process, since its commencement in 2009. In fact, NLH is of the opinion that it is necessary to perform a global assessment of the 95 Standards, rather than assigning an individual interpretation to each, many of the Standards being co-dependent or interactive. As a result of this inability to divorce Standards one from one the other, NLH believes that it is possible that some of the 95 Standards presently under consideration may require adjustments after the next group of Standards is presented. This reassessment may be required to ensure that all of the Standards presented are not only consistent with one another but are as well consistent with the manner by which the HQ system is planned and operated. DM_MTL/900002.00001/2955770.1