OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
PO Box 160
Moccasin, CA 95347
T 209.989.2000
F 209.989.2104
Junction of Hwy 49 and Hwy 120
March 16, 2022
TO: Anson Moran, Commission President
Newsha Ajami, Commission Vice President
Sophie Maxwell, Commissioner
Tim Paulson, Commissioner
THROUGH: Dennis J. Herrera, General Manager
FROM: Steven R. Ritchie, Assistant General Manager, Water Margaret A. Hannaford, SFPUC NERC Compliance Officer
RE: 2021 Annual Electric Reliability Compliance Program Report
The San Francisco Public Utilities Commission (SFPUC) Electric Power Reliability Compliance Program (Compliance Program) requires SFPUC Executive Staff to report to the Commission annually on the progress of the Compliance Program. This is the report for calendar year 2021.
EXECUTIVE SUMMARY
Functional Registrations: We are registered with North American Electric Reliability Corporation (NERC) as a Generator Owner, Generator Operator, Transmission Owner, Transmission Operator, and Transmission Planner. In 2021, we reviewed Power Enterprise’s owned and planned facilities to evaluate the impact to our required functional registrations. Though there has been an expansion in Power Enterprise’s footprint, no changes to our functional registration were required in 2021. We will continue to monitor the status of facilities for impacts to our required functional registrations.
Funding: The SFPUC’s NERC Compliance Program is funded through a NERC Compliance line item and other operating budget sources. Actual expenditures for FY 2020-2021 were $4 million. Expenditures for FY 2021- 2022 will be limited to $4 million.
Personnel: We will begin recruiting for two WECC/NERC administrative support vacancies in July 2022.
Compliance Program: We reviewed our Compliance Program document during 2021. No material modifications to our Compliance Program were identified so the document was not updated.
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
Enforcement Actions: We self-reported one violation during calendar year 2021. Three self-reports remain open (one from 2021, 2020 and 2019). We are awaiting information from Western Electricity Coordinating Council (WECC) regarding any additional mitigation actions required or potential penalties; however, at this time no additional action by us is required.
Self-Certification: In February 2021, we completed the Annual WECC Self-Certification process for calendar year 2020. We were required to self- certify to two Operations & Planning (O&P) and five Critical Infrastructure Protection (CIP) Reliability Requirements. We did not identify any violations during the self-certification process.
Procedure Review: We reviewed and updated 30 of our 37 O&P and CIP procedures during 2021. Modifications were made to reflect new/revised Reliability Standards that went into effect in 2021.
Reliability Standard Audit Worksheets (RSAWs): RSAW templates are developed by NERC and are utilized during audits and other regulatory reviews to summarize the entity’s compliance procedure, supporting compliance evidence and related internal controls. In 2021, we completed our RSAW Review Project (2018-2021), ensuring we had accurate RSAWs for all Standards applicable to SFPUC. Moving forward, we will continue to perform maintenance of these RSAWs, updating them for new Standards or Requirements.
Line Clearance Issues: In conformance with a 2010 NERC Alert, we were required to identify discrepancies between transmission line design clearances and actual field condition clearances (hard clearances, e.g., ground, streetlights, wires). We identified 210 locations that required mitigation. To date we have remediated 62 transmission line clearance discrepancies, completing eleven projects in 2021. We are expecting to remediate 40 discrepancies in 2022.
Regulatory Update:
New, updated or modified Reliability Standards continue to be approved by the Federal Energy Regulatory Commission (FERC). There are nine applicable Standards approved as “Subject to Future Enforcement” with effective dates that vary throughout 2022 and 2023.
Securing the grid against cyber and physical attacks, effectively preparing for and responding to extreme weather events (e.g., snow, floods, heat, wind, storms, etc.), and maximizing the capacity of the grid were important regulatory issues in 2021. We expect these items to continue to be important focus areas in 2022. We regularly monitor these regulatory developments and will adjust our activities accordingly.
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
2021 REPORT
Functional Registrations: We are currently registered with NERC as a Generator Owner, Generator Operator, Transmission Owner, Transmission Operator, and Transmission Planner under the name HHWP. In 2021, we reviewed Power Enterprise owned and planned facilities to evaluate the impact to our required functional registrations. Based on this review, we have determined that no changes in our NERC Registrations are required at this time. We continue to monitor the obligations for Power Enterprise’s facilities (e.g., Bay Corridor Transmission Distribution Project and substations that feed San Francisco International Airport), which may require us to register as a Distribution Provider or an Underfrequency Load Shedding-Only Distribution Provider (UFLS-Only DP).
In addition to our current transmission interconnections, we have received requests to connect new generation to the SFPUC transmission lines. Given these requests and the status of the related studies, we are reevaluating the implementation of a transmission tariff. If a tariff is implemented, we would be required to register with NERC as a Transmission Service Provider.
Funding: The SFPUC’s NERC Compliance Program is funded through a NERC Compliance line item and other parts of the HHWP operating budget.
Efforts have focused on maintaining our program to meet current and upcoming Standards with total expenditures for FY 2020-21 and FY 2021-22 of $4million each year. The Commission-approved NERC Compliance line item for the FY 2022-23 budget has been increased to $4.5 million. Beginning in July 2022, we will begin plans to streamline data collection and archiving efforts on the O&P side.
Personnel: Entities must designate a NERC Compliance Officer and a CIP Senior Manager. The HHWP Division Manager has been assigned these roles.
During 2021, the Compliance Program continued to be staffed by consultants. One consultant is acting as the Compliance Manager; the second is the CIP Specialist; the third is the O&P Specialist; and the fourth is the Compliance Coordinator. The HHWP Division Manager oversees the Compliance Manager. Due to budget cuts the hours for these consultants were reduced; and due to COVID-19 protocols, except for the Compliance Coordinator, the consultants have worked 100% remotely. During 2021, COVID-19 continued to hinder recruitment efforts to fill positions in our Compliance Program. HHWP will be recruiting to fill a manager and one support staff position during FY 2022-23.
Subject Matter Experts (SMEs) continue to be HHWP Operations, Engineering and Information Technology staff, with some exceptions. In 2021, the manager for HHWP’s electrical engineering group retired, however, we also gained an electrical engineer (5241) who is now acting as DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
the manager. We continue to rely on electrical engineering consultants when we lack bandwidth or expertise. We will continue to recruit for electrical engineers in FY 2022-23.
Minor SME responsibilities extend to 525 Golden Gate with support from Emergency Planning and Security and Information Technology staff who manage physical access to specific HHWP and SFPUC data centers, and to Power Enterprise as they expand their NERC related assets.
Compliance Program: In 2021, we reviewed our Compliance Program document, the guiding document for our program. No material modifications were identified during this review, so the document was not updated.
Staff and consultants committed significant resources to maintaining the NERC Compliance Program including:
NERC Compliance Team Meetings: Monthly meetings with the NERC Compliance Team were held to discuss status of projects outlined in the 2021 Annual Work Plan, enforcement actions, and other key issues impacting compliance.
Regulatory Reports: The Regulatory Report is prepared every other month, summarizing significant compliance activities and progress achieved during the respective reporting period. Distribution includes the Compliance and Executive teams.
Executive Team Biannual Briefing: The NERC Compliance Officer provided briefings to SFPUC Executive Staff on June 29, 2021. The December 2021 briefing was moved to February 9, 2022, due to scheduling and staffing changes. The briefings included status updates of 2021 and 2022 Work Plans; high priority projects; open enforcement actions; upcoming changes to the regulatory standards; and potential changes to functional registration.
Enforcement Actions: We currently have three O&P related open enforcement actions self-reported in 2019, 2020 and 2021. The 2019 and 2020 open enforcement actions were reviewed by the WECC Auditors during the WECC Compliance Audit in 2020. Final resolution by WECC Enforcement on these two open enforcement actions and the one in 2021 is still pending. At this time, we are not aware of any additional mitigation actions required. Penalties may be assessed by WECC.
Self-Certification: In February 2021, HHWP completed the Annual WECC Self-Certification process for calendar year 2020. The Self-Certification assessed HHWP’s compliance with one O&P Standard that includes two Requirements applicable to SFPUC; and two CIP Standards that include five Requirements and the related Parts applicable to SFPUC. We did not identify any additional violations during the self-certification process.
WECC has informed us that we will not be required to self-certify for calendar year 2021.
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
Procedure Review: Our program includes 37 O&P and CIP operational procedures used by our staff. We reviewed and updated 30 of our 37 procedures in 2021: 18 O&P procedures and 12 CIP procedures. These procedures are a component of the controls utilized to mitigate risk of non- compliance. Accordingly, the procedure reviews included ensuring the documented processes support compliance with each of the over 1,500 Reliability Requirements and related parts/sub requirements applicable to us. The procedures that were not reviewed in 2021 will be completed in 2022 based upon our procedure review schedule. Additionally, we will identify which procedures require review again in 2022 based on a priority of 1) Annual reviews required by the Reliability Standards; 2) Effective date of new or modified Standards; 3) Materiality of the of updates or revisions to Standards; 4) Operational changes within the business; 5) Procedures related to completion of mitigation plans; and 6) Biennial review based on good business practice procedures.
Reliability Standard Audit Worksheets (RSAWs): RSAW templates are developed by NERC and are utilized during audits and other regulatory reviews to summarize the entity’s compliance procedure, supporting compliance evidence and related internal controls. We have approximately 90 RSAWs. During 2021, we completed enhancing the consistency of the language describing key internal controls associated with meeting compliance and inserting examples of key internal controls in each RSAW, a three-year effort. Going forward, our approach to reviewing/updating RSAWs will be to review approximately one-third of the RSAWs each year, so as to review/update all RSAWs within a 3-year period (consistent with our audit frequency). The RSAWs to be reviewed/updated will be based upon 1) New or modified Standards effective during the year; 2) Materiality of the of updates or revisions to Standards; 3) Operational changes within the business; and 4) Modifications related to completion of mitigation plans.
Planning Coordinator: The NERC Functional Model requires that all Bulk Electric System Facilities be assigned under the purview of a Planning Coordinator. CAISO serves as our Planning Coordinator through a Planning Coordinator Agreement. During 2021, we completed execution of a new Planning Coordinator Agreement with CAISO. The new PC Agreement expires in 2031.
Reliability Assurance Project: During 2019, WECC staff were onsite performing interviews with select staff and touring the Primary Control Center in conjunction with WECC’s Reliability Assurance Project (Project).
As previously reported, WECC Staff provided positive feedback and actionable recommendations to HHWP’s Division Manager and SFPUC’s General Manager. During 2020, we implemented certain recommendations from WECC Staff; however, due to COVID-19, insufficient contract capacity, and funding, we were not able to implement all recommendations.
During 2021, due to the status of COVID-19 travel restrictions, neighboring utilities’ staff availability, insufficient contract capacity, funding, and our DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
resource availability no additional actions were taken. We intend to implement other recommendations in FY2022-24.
New Standards: HHWP is responsible for approximately 70 Standards (representing over 1,500 Reliability Requirements and related parts/sub requirements). Changes in 2021:
Thirteen new or revised applicable O&P and CIP Reliability Standards (138 requirements) went into effect. We implemented processes and procedures to timely meet compliance for each of the new or revised Reliability Standards.
We began implementation efforts associated with a new Reliability Standard (CIP-012 - Communications between Control Centers) which becomes effective in 2022.
We began work to evaluate compliance requirements for FERC approved changes to three Standards related to extreme weather effective in 2023, and compliance requirements for FERC’s Final Rule associated with adjusted ambient transmission line ratings.
Line Clearance Issues: We own and operate almost 324 miles of 115 kV and 230 kV transmission lines within 134 miles of right-of-way corridor. As part of a NERC Alert, we were required to identify discrepancies between transmission line design clearances and actual field condition clearances.
We identified 210 discrepancies that required mitigation.1 We have limited access to these conditions by installing fencing and posting signs. We planned to remediate 30 discrepancies in 2021; however, due to COVID-19, and the related coordination required with other entities, we remediated only 11 discrepancies during 2021. Since the project’s inception, we have remediated 30 percent of the original discrepancies (62 discrepancies with 148 remaining). We plan to mitigate 40 discrepancies in 2022, including 16 discrepancies that were not completed in 2021.
NERC also requires Transmission Owners to implement a program for avoiding transmission line contacts with vegetation. We use a combination of LiDAR information and visual inspections to manage this program.
We maintain a Transmission Vegetation Management Plan to proactively manage vegetation within and outside our transmission right of way. As of December 31, 2021, within our right of way, there were:
Zero “high risk” grow-in trees, i.e., trees that are within 6 feet of the transmission lines;
Zero “critical grow-ins” trees, i.e., trees that could become a “high risk” tree within a growing season or two; and
1 A discrepancy is defined as a location where the clearance between the conductor and a hard object do not meet either the National Electric Safety Code or the CPUC, General Order 95, minimum safety clearance criteria. A hard object can be the ground, a building, other electrical wires, etc.
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
Zero “potential grow-ins” trees, i.e., trees that could become “critical grow-ins” within a growing season or two.
We continue to monitor tree growth and work jointly with the farmers to address trees within our right of way.
As previously reported, there are trees outside of our right of way, that could fall into, or grow into, our transmission lines, causing damage to our infrastructure or starting fires. These trees are on federal lands or private property. During 2021, we removed 222 “critical fall-in” trees, and 41 “potential fall-in” trees on USFS lands. As of December 31, 2021, outside our right of way, there were:
Trees outside of right of way that could fall into our transmission lines Offset less than 40 feet
o 23 critical trees that could grow within 6 feet of our transmission lines within one year (almond trees which will be trimmed); and
o 35 potential trees that could grow within 6 feet of our transmission lines within a growing season or two (almond trees which will be trimmed).
Offset greater than 40 feet
o 264 critical fall-in trees. Remaining trees are on private land between Ferretti Rd to Groveland. These trees will be
removed in spring 2022.
o 51 potential fall-in trees. Remaining trees are on private land between Ferretti Rd to Groveland. These trees will be
removed in spring 2022.
Regulatory Update: New, updated or modified Reliability Standards continue to be approved by FERC. There are currently nine applicable Standards approved as “Subject to Future Enforcement” with effective dates varying throughout 2021 and 2022. Additionally, there are a total of seven applicable Standards at various stages of completion identified by NERC as “Filed and Pending Regulatory Approval.” We monitor and adjust processes and procedures to meet the changing Requirements by the respective effective date.
NERC/WECC continue to review and adjust their oversight activities to reflect their own risk assessments and the degree of internal controls put into place by the regulated entities. Participation in Industry Forums and WECC sponsored workshops/conferences (e.g., Reliability and Security Workshop) aid in understanding any changes to NERC/WECC compliance philosophy or approach. NERC’s 2022 Compliance Monitoring and Enforcement Program identified a focus on 1) Remote connectivity; 2) Supply chain; 3) Models impacting long-term and operational planning; 4) Gaps in program execution; 5) Protection System coordination; and 6) Extreme events.
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E
During 2021, WECC introduced a new Internal Controls Data Collection Template and Assessment Process for use during audits beginning in 2022.
Our 2022 compliance work plan includes performing a "gap analysis” to determine if any modifications to existing internal controls documentation is required.
Securing the grid against cyber and physical attacks, effectively preparing for and responding to extreme weather events (e.g., snow, storms, heat, wind, etc.), and maximizing the capacity of the grid were important regulatory issues in 2021. Significant events include:
FERC approved modifications to three Reliability Standards to address certain concerns associated with winter weather conditions. The modifications will require generator owners/operators to develop and implement cold weather preparedness plans addressing issues such as freeze protection measures, generating certain cold weather data, identifying cold weather operating limits, cold weather training, fuel supply and switching capabilities, and other factors.
FERC and NERC Staff issued a joint report on the February 2021 cold weather event. NERC has initiated a new standards development process to incorporate the report’s recommendations into NERC Reliability Standards. Several of the recommendations will apply to Generator Owners and Operators.
NERC’s 2021 State of Reliability Report emphasizes areas of concern such as extreme natural events (e.g., snow, floods, heat, wind, storms, etc.), cyber and physical security risks, wildfires, etc., and will likely result in new or additional modifications to the Reliability Standards. FERC approved a new Critical Infrastructure Protection Reliability Standard (CIP-012) which among other things requires encrypting certain communications between Control Centers.
The FBI, EPA, NSA, and CISA published a joint alert discussing the “Ongoing Cyber Threats to U.S. Water and Wastewater Systems.” FERC issued a Final Rule on Transmission Line Ratings. The Final Rule requires transmission providers to implement the use of ambient- adjusted ratings for near term transmission service (transmission service that ends within 10 days of the request). FERC’s Final Rule includes a 3-year implementation period. As part of FERC’s Final Rule, FERC noted that it would explore the adoption of dynamic ratings. Dynamic ratings measure capacity in real-time, considering other factors such as wind speed, direction, cloud cover, altitude, etc. To that end, FERC has recently initiated a Notice of Inquiry on Implementation of Dynamic Line Ratings.
We continue to monitor these regulatory developments and will adjust our activities accordingly.
cc: Moccasin Records
Lenise Kimes, NERC/WECC Compliance
DocuSign Envelope ID: 925AE6AD-B4C1-443D-90ED-D3D3F718B50E