 Hello, my name is Matthew Elkins, I am the manager of performance analysis at the Western Electricity Coordinating Council. The topics of discussion for this presentation are, session number one will focus on what is WEC and how we came to be. A brief history of major events that led to the forming of the ERO Enterprise, which includes WEC. Following session number two will review the activities WEC does on a recurring basis. The everyday tasks we focus on to make sure the electric grid remains reliable. And finally, session number three will look at how we study new risks as they present themselves in the industry. Risks that are unique at the given moment and how we address these challenges. Session number one, what is the Western Electricity Coordinating Council? One of the unique characteristics of the electric industry is how all participants are highly interconnected. From suppliers to consumers, every participant can have an impact on others at any given moment. This map shows just how interconnected the electric grid is. Not only in the United States, but also across international borders, into Canada's and Mexico's systems. Numerous transmission lines and substations exist to supply and transfer energy to those who use it every minute of every day. Currently, large-scale electricity cannot be stored. This means that the amount of electricity being supplied to the grid must be equal to the amount of electricity being used. If the planning and operation of this complex system isn't coordinated, many people can be affected. As society becomes more reliant on electricity, ensuring a reliable electric grid becomes increasingly vital with every advance in technology. For example, we all rely on electric grid to charge our cell phones. Imagine a couple days without your cell phone. We use electricity so much, sometimes we don't realize the importance of it until it is gone. Things like keeping food refrigerated or air conditioning our homes in the middle of summer. Even more critical, there are many people who rely on electricity to power machines that help them breathe at night, even life support machines at the hospitals. The list is endless, so when a power outage occurs, everyone is impacted, sometimes in life-threatening ways. Electricity is an integral part of the fabric of society. Wex strengthens the fabric to preserve and improve society's future. In the past, there have been significant outages across the North American grid. The western outages of 1996 led to the forming of the Wex Reliability Management System, a precursor in the western interconnection to the NERC's standards enforcement, which we will discuss. Of all the significant outages, the 2003 northeast blackout was one of the most impactful, not only during the event, but what transpired in the industry after. In the summer of 2003, one of the most notable outages occurred in the northeast, affecting roughly 50 million customers, some for as long as 30 hours. It should be noted that customers typically means the number of households, many with several people. So the number of people affected was quite a bit. This event hit major cities during rush hour traffic and the sweltering heat. The societal impact was great, and afterward, people wanted to know what could be done to lessen the effects, or even prevent this from happening again. In response to the 2003 blackout, the Federal Power Act was passed in 2005. Among other things, this act directed the development of mandatory and forcible reliability standards, standards that, when adhered to, would increase the reliability of the electric grid, through contingency planning, operating schemes, or communication and coordination. Another important outcome of the act was the establishment of the Electric Reliability Organization, or ERO. This function was delegated to the North American Electric Reliability Corporation, or NERC. NERC subsequently delegated some of this authority to regional entities. WEC is one of those entities. All regional entities and NERC make up what we call the ERO Enterprise. Overall, the ERO Enterprise is composed of four independent interconnections, overseen by seven regional entities that ensure a reliable grid. Although there are some connections between the four interconnections, those connections are mostly for redundancy during emergencies. Five of the regional entities are located in the Eastern and Quebec interconnections. One regional entity focuses on the reliability of the ERCOT interconnection in Texas. And finally, WEC is the regional entity that ensures the reliability of the Western interconnection. On a recurring basis, all regional entities attend NERC committees and discuss current issues of reliability, historical performance, forecast plans, etc., some of which will be discussed in session number two. But for now, we will focus on the Western interconnection and WEC. At the time the regional entities were delegated authority from NERC, WEC was already in place as a coordinating council. Starting as early as the 1960s, entities in the West wanted someone that could coordinate planning in the Western interconnection. When NERC was looking for a regional entity in the West, WEC was a natural choice and became part of the ERO Enterprise in 2007. Today, WEC is an independent organization that works with entities across the West to ensure the reliability of the grid. The Western interconnection is geographically the largest of the areas overseen by the seven regional entities. It covers roughly 1.8 million square miles and approximately 82.2 million people. WEC currently has 329 registered entities from utilities to transmission and or generation owners, all of whom report information to 38 balancing authorities. The 38 balancing authorities are charged with keeping their sections of the interconnection balanced and facilitating the planning of the registered entities in their territories. There are two entities that coordinate the 38 balancing authorities in the pursuit of a reliable grid. A reliability coordinator, currently peak reliability, coordinates the balancing function among the balancing authorities in real time operations and day ahead planning and works closely with transmission operators to monitor the grid. WEC, on the other hand, coordinates the balancing authorities to support reliability planning in the near and long term and to develop, monitor, and enforce standards. WEC also coordinates planning systems and models across the interconnection. The coordination that WEC provides can be seen in three distinct areas. Risk-based compliance monitoring and enforcement focuses on industry and regional standards to determine potential risks to reliability. They also coordinate registration of new entities. The planning and performance side analyzes the forecasts of our entities to ensure the interconnection is planned for in totality. They also analyze the past performance of the grid to find potential risks to reliability. Finally, WEC has several member committees that discuss issues that may impact reliability. Although we won't spend too much time on WEC's member committees, if you are interested in learning more, information on each committee and its purpose is located on the WEC website. In session number two, we will discuss more in-depth how WEC meets its delegated functions and coordinates compliance, performance, and planning. For now, it is important to remember why WEC is here. With over 82 million people relying on electricity in the western interconnection, making sure the grid is reliable, coordinated, and planned for is a pretty important role. WEC envisions a highly reliable and secure bulk power system in the western interconnection, and our mission is to make it so. To reduce the risk to reliability through the coordination expertise we can provide. Just how we do that will be discussed in session number two. Session number two. What are some of the delegated functions of the Western Electricity Coordinating Council? In session number one, we briefly mentioned the Federal Power Act of 2005, which was developed in response to the 2003 Northeast Blackout, and how authority was delegated to WEC from NERC in response. In session number two, we will walk through some of the key functions that were delegated to WEC to study potential risk in the system, and how WEC fulfills these functions. We will look at each of these areas within WEC and discuss some of the day-to-day tasks each is focused on to ensure a reliable grid. From standards development to the many sub-areas of both compliance and reliability planning and performance analysis, all have delegated functions that are focused on. We will start with standards development. The main outcome of the Federal Power Act was the need for standards throughout the industry to ensure a reliable electric system to help reduce the frequency and severity of a power outage like the Northeast Blackout, to try and prevent an outage like that from happening again. As directed by the act, NERC, working with the regional entities, developed mandatory enforceable reliability standards that all users, owners, and operators of the bulk power system must follow. WEC was part of this development and continues to be part of new standard discussions. With how diverse the North American system can be, sometimes there are standards that are only relevant in one of the interconnections. Through the NERC Delegation Agreement to WEC, WEC has the authority to propose and develop new industry standards, and develop regional standards specific to the Western interconnection. Following a similar process as the NERC standards, regional standards or criteria, can be developed and adopted. These standards and criteria become mandatory and enforceable along with the industry standards. There are times that, through the development process of regional standards, it is found that a criterion may be more appropriate. Regional criteria may also address issues outside the scope of reliability standards, such as resource adequacy, and may include specific acceptable operating or planning parameters, guides, agreements, protocols, or other documents used to enhance the reliability of the bulk power system in the region. WEC coordinates the development of both regional standards and criteria. When the regional standards and criteria are combined with the NERC standards and memorandums of understanding with the international participants of the system, all users, owners, and operators of the bulk power system in the Western interconnection must follow these requirements. Once the standards are in place, the next step is to decide who needs to comply with which standards and to monitor all participants to ensure compliance. This is done through WEC's risk-based compliance monitoring and enforcement. Not all standards apply to all participants. Generator owners, for example, have different standards to follow than generator operators. The NERC rules the procedure define each role and its responsibilities so that participants know the standards to which they must adhere. Through the registration process, WEC helps define those roles for the entities and to which standards they must comply. WEC coordinates the process of registering all existing participants and new participants and helps determine which functions each entity maintains. This is done through conducting reviews, making recommendations, and submitting applications to the NERC registry. Once the entity is registered, compliance to the standards begins. Making sure that all participants follow the mandatory standards is one of the main ways WEC helps to ensure the reliability of the electric grid. Through a delegated function, WEC determines the need for new standards, monitors standards to make sure they are providing reliability, audits all registered participants to make sure they are adhering to their approved industry and regional standards, and then working with the entities to help maintain compliance. A lot of this is done through coordination between WEC and the entities. Constant communication helps ensure that entities can stay compliant and, in turn, continue to practice in a way that promotes the reliability of the interconnection. However, the compliance process doesn't just end with enforcement or even an audit. Understanding the risks and monitoring the impact standards have on the reliability of the system is a constant circular communication process, determining the risks, monitoring them, doing audits, and helping those in non-compliance become compliant then circles back to studying risks, considering root causes, and deciding if new standards are needed. The ability to identify potential risks to reliability and whether standards are leading to improvements in reliability is a key function. Finally, the reliability planning and performance analysis teams outside of compliance help identify potential risks to the system as well. This is done through either historical review of performance or forecast planning scenario studies. In historical performance, there are two states of the system, when an event occurs and when no event occurs, WEC studies both. When an event occurs on the system, the event analysis team studies the event to determine exactly what happened, the moments leading up to the event and how the system recovered from the event. One recent event was the blue-cut fire in California, which ended up taking solar generation offline. Understanding how a fire near transmission lines led to a loss of generation in the surrounding parts of the system helps determine how to avoid such events in the future and keeps the system reliable. Most of the time, events are not occurring on the system, but understanding how the system is operating daily helps identify potential risks. The situation awareness team monitors day-ahead system conditions and analyzes the current state of the interconnection. Relaying information to the industry daily can help operators understand what risks might be present. Daily reports and calls help inform the industry on potential risks. Finally, the performance analysis team summarizes the historical performance of the system and reports the overall annual performance of the system through WEC's state of the interconnection report. One example from the interactive report is the ability to see the annual generation by fuel type for different balancing authorities, as in this example showing the 2016 generation totals for the Kaizo. Analyzing trends of system conditions and how the system operated helps to identify growing risks. These trend analyses help the forward-looking teams at WEC to analyze possible future states of the interconnection. When studying the forecast of the system, three critical areas of focus are found. That is, resource adequacy, focused on whether there are plans for enough supply to meet demand, system adequacy, which ensures there is enough system in place to move the produced energy to the demand centers, and finally, system stability. Looking at how the system will operate under the proposed future systems. Using the historical performance data, the resource adequacy team applies these insights to near-term forecasts of the system. Through another delegated function, WEC reports both deterministic and probabilistic resource adequacy assessments back to NERC, so that NERC can determine whether the entire system is being planned for adequately through the next ten years. Given resources can be built relatively quicker than transmission systems, the near-term, one to five years, is the focus. This slide shows possible risk in the system. In this case, ours where there is a potential for a loss of load, at varying different margin levels over different years. Margins are the amount of resources available above the expected demand. Looking past the near-term, the system adequacy planning team focuses on potential reliability risks from resource adequacy and load changes. Like the performance analysis team does for the near-term, but they also focus on potential reliability risks caused by transmission congestion. Looking at year 10 and year 20 forecasts, this team can mitigate potential risks with longer-term solutions, such as building new transmission lines. The team also works closely with WEC stakeholders to focus in on issue-based assessments, which will be discussed more in session number three. Finally, the system stability team focuses on predicting how a system will respond to future events. As shown in this slide, they look at frequency response during an event to predict the time needed for recovery. They coordinate a system-wide model by integrating all the planning models in the interconnection, which enhances WEC's overall ability to participate in and respond to major planning issues. The system stability planning team uses the system-wide model to identify potential risks and to make sure the system models are comparable to actual system event responses. Although these are not all of WEC's delegated functions, as WEC also provides training and education to its stakeholders, what is apparent is that WEC is focused on securing a reliable interconnection through identifying risks, sharing information with its members, and helping to mitigate those risks. WEC does this through standards, compliance, and analysis. In session number three, we will look at how these teams work together to tackle specific reliability issues. Session number three, issue-based risk analysis. In session number two, we focused on how each of the departments throughout WEC identifies potential risks to the system. Although all departments have individual tasks, when a potential risk presents itself, all departments come together to analyze, understand, and help the interconnection continue to be reliable. In session number three, we will explore some of the risks that are prevalent in the industry and a risk that is prevalent only in the Western Interconnection. We will discuss how WEC studies these risks as an organization coming together to mitigate these risks and promote the reliability of the interconnection. The issue-based assessment approach is based in the context that the reliability of the Western Interconnection is constantly changing, and many trends, issues, and policies could affect WEC's and other stakeholders' abilities to maintain a reliable electric grid. Flexibility is crucial. In the past, risks would be studied only if the model and use was able to study that risk. As WEC has transitioned into more of an issue-based approach, the focus is on the potential risk, what assessment is needed, and what model and data are needed to study that risk. By bringing together the departments of the reliability, planning, and performance analysis function, to focus on a single reliability issue, a complete understanding of the impacts of a reliability issue can be determined. Mitigating recommendations can be conveyed to WEC's stakeholders, providing planners and operators with information. This work will help secure a reliable grid as reliability issues present themselves. To see this in practice, we will look at some of the current risks that WEC is exploring. They are the changing resource mix and how reliability is measured. The issue of a growing gas-electric interface, where more and more gas-generation resources are reliant on the same gas pipeline for fuel, and finally, a Western Interconnection focus on the expansion of the reliability coordinator footprint. As of today, the Western Interconnection has one reliability coordinator. In a few years' time, there may be many. The first two risks are technical in nature and can be studied through scenario-based analysis. The third risk must be mitigated through coordination. One of the most significant issues facing the industry today is the rapidly changing makeup of the generating portfolio. Ten years ago, the portfolio was made up of mostly baseload resources, such as coal, natural gas, and nuclear, along with a significant amount of hydro. Now, with the focus on clean energy, wind and solar resources have begun to penetrate a significant part of the portfolio, especially in the last five years. When combined with the hydro capacity, the amount of variable energy resources in the Western Interconnection has grown to over 40% of the total capacity. With a notable change in the electric system, the forecast planning teams at WEC need to determine how best to analyze a changing system to keep the grid reliable. The resource adequacy team will focus on the shift in the near term to make sure the system is reliable. In the past, fuel adequacy was not typically an issue for availability of resources. As shown in this chart, there is a wide range in availability of variable energy resources. Focusing more on a range of possible generation levels from these resources, using a more random approach, the team studies future systems with differing levels of generation to understand where risks may be present. Using numerous scenarios to identify risks and recommendations to mitigate risks is paramount. Once the near term is found to be reliable, the system adequacy team can then study ways in which the system might not be adequate in the long term. The current study program has scenarios focused on the possible mitigating impacts of potential energy storage systems, studies focused on operational needs such as ramping, and studies focused on the effects of transmission congestion as resources are built in various locations. These studies will help identify potential risks caused by the changing resource mix. And finally, the system stability team will analyze the potential operating characteristics of the system as portfolios change. Ensuring that inertia and voltage stability throughout the system will be maintained as the portfolio changes will help to keep a reliable grid. The team will then simulate events like the blue-cut fires impact on inverters to better understand what the future of the system might be and how it will react to events under different generating portfolios. The next reliability issue is that of the gas-electric interface. As an increasing number of gas-fueled generators are being located on single pipelines, the risk to reliability can grow with the loss of a pipeline. Like the changing resource mix, scenario planning among the planning teams at WEC is paramount. However, when a current issue is more detailed than the data readily available, or when the issue spans two industries, WEC will work with consultants and labs to understand the issues. In 2017, after the loss of the Aliso Canyon Natural Gas Storage Facility in Southern California, WEC became more concerned about the reliability of the electric grid as it relates to the availability of natural gas. In response to the extended outage of the storage facility, WEC commissioned Wood McKinsey to do an evaluation of the reliability of the Western Interconnection's electric system in case of major disruptions on natural gas supply and delivery. The evaluation was to focus on four elements, one, identifying vulnerabilities to the electric grid caused by gas system disruptions, two, evaluate mitigation options to reduce those vulnerabilities, three, identify risks associated with how natural gas is contracted by electric generation and look at the impacts of market rules and protocols for both the gas and electric systems, and finally, four, provide recommendations for both WEC and key stakeholders. The report and presentation that the next few slides are from are fairly detailed. And if you're interested, they are on the WEC's website, so I won't spend too much time diving into the results. The key is to get a feel for how reliability issues are studied through scenarios, results, and recommendations. With several natural gas generators connected to common pipelines, the loss of a pipeline can cause numerous outages of generating resources on the electric grid. The project team for this study modeled five different scenarios and then repeated each scenario with low hydro conditions just to magnify the impacts in differing potential futures. Three of the scenarios centered around the disruption of certain gas pipelines located in the western interconnection, those being a Pacific Northwest pipeline, a Basin pipeline, and a Desert Southwest pipeline. One scenario focused on the potential of a seismic event, limiting the supply of both electric generation and natural gas deliveries from Alberta, Canada down into the U.S. And the final scenario looked at the potential of a freeze-off, in which parts of the Permian and San Juan Basins were unavailable. The impact to natural gas-fired generation under each of the scenarios, along with the expected disruptions to electric demand due to the loss of gas-fired capacity, was calculated. The disruption in the Desert Southwest would result in the largest loss of electric generation in Arizona and Southern California, which correlates to over 400 gigawatt hours of unserved demand and an additional 230 gigawatt hours of unmet reserves. The freeze-off scenario with limited hydro was the second most severe impact to capacity, but had very little impact on unserved energy, with no unserved demand and only 23 gigawatt hours of unmet reserves. Note that although there is the potential for large amounts of unserved demand, these events have low probabilities of occurring. For example, the project team determined the probability of loss of the Desert Southwest pipeline to be around 4%. Even given the low probabilities, this study shined light on a potential reliability issue in not only the Western Interconnection, but the industry. The major takeaway from the study is that a portfolio of options will be needed to mitigate the problem. A final list of recommendations was developed and has been circulating around the industry to make entities aware of the potential risk. The planning teams at WEC are continuing their focus on this potential risk and incorporating these impacts into their scenario studies. The last current reliability issue we will focus on is the expansion of the reliability coordinator in the Western Interconnection. The first two reliability issues, both the changing resource mix and the gas-electric interface, were highly technical and operational issues focused more on system planning. However, sometimes the WEC function of a coordinator is needed to mitigate impacts of potential risks. If you remember from session number one, there are two entities that coordinate the 38 balancing authorities in the pursuit of reliable grid. We as WEC and a reliability coordinator focused on real-time operations and day-ahead planning while working closely with transmission operators to monitor the grid. In 2018, the current reliability coordinator that oversees the Western Interconnection announced that it would no longer oversee this function starting in 2020. After reviewing who could fill this role, it was determined that many entities working together to cover the Western Interconnection would work well. However, the issue now becomes the transition and how to make it happen. WEC being the planning coordinator has stepped in to participate and facilitate coordination of the transition from one reliability coordinator to many reliability coordinators, all of whom are trying to be up and running by 2020. WEC is currently participating in several committees, work groups, and task forces to make sure that the transition is successful. Out of these discussions, one potential risk was noted, which led to the need for WEC's system stability team to do analysis to help mitigate the issue. What was labeled the SEEMS issue became apparent after overlaying the Western Interconnection transmission map with the proposed reliability coordinator footprint map of the proposed reliability coordinators. The system stability team needed to study all the points at which a major transmission line crossed from one reliability coordinator to the next to make sure there were no holes in the fabric of the interconnection. The slide lists all the topics they focused on. Coordinating how events would be handled or how deviations in frequency would be remedied were just a few of the things WEC helped coordinate. In the end, all potential reliability coordinators went through the list of issues and developed plans for how each would be handled, making sure there were no SEEMS issues and that the system was woven together tightly. Although the industry has changed and continues to change daily, the vision of WEC remains unchanged. To have a highly reliable and secure bulk power system in the Western Interconnection. Through the daily functions of all our teams to identify potential reliability issues. And by coming together as an organization to study identified reliability issues, our mission remains to effectively and efficiently reduce risk to the reliability and security of the Western Interconnection's bulk power system. Although almost everybody relies on electricity to be there when they throw a light switch or plug in their phone. Very few consider the amount of coordination and monitoring it takes to maintain a reliable interconnection. We just expect electricity to be there. Electricity is an integral part of the fabric of modern society. WEC strengthens that fabric to preserve and improve society's future. Thank you.