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. 1 LaHetch Hetchy Water & PowerP.O. Box 160 Moccasin, CA 95347T 209.989.2000F 209.989.2104 May 12, 2026 TO: Joshua Arce, Commission President Steve Leveroni, Commission Vice President Avni Jamdar, Commissioner Kate H. Stacy, Commissioner Meghan Thurlow, Commissioner THROUGH: Dennis J. Herrera, General Manager FROM: Steven R. Ritchie, Assistant General Manager, Water Adam Mazurkiewicz, HHWP Division Manager, SFPUC NERC Compliance Officer RE: 2025 Annual Electric Reliability Compliance Program Report The San Francisco Public Utilities Commission (SFPUC) Electric Power Reliability 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 2025. Background The SFPUC owns and operates power generation and transmission assets that are part of the Bulk Electric System (BES). The North American Electric Reliability Corporation (NERC) establishes and enforces mandatory reliability standards to ensure uninterrupted service to customers across the BES. NERC is subject to Federal Energy Regulatory Commission (FERC) jurisdiction and works through regional entities, including the Western Electricity Coordinating Council (WECC) which oversees utilities in the West. The Reliability Standards require owners/operators of power system assets to develop and implement policies, procedures, programs, operational protocols, and training to ensure the reliability, security, and resilience of the North American BES. The SFPUC adopted the Electric Power Reliability Compliance Program (NERC Compliance Program) in 2010 to ensure ongoing compliance with
the NERC and WECC Reliability Standards. The applicable Reliability Standards are based on the types of services provided (i.e. Functional Registrations). HHWP has the following five Functional Registrations: (1) Generator Owner, (2) Generator Operator, (3) Transmission Owner, (4) Transmission Operator, and (5) Transmission Planner. SFPUC is required to meet over 1,500 requirements based upon these registrations. Compliance responsibilities are applicable to various SFPUC bureaus/divisions. The Reliability Standards continue to evolve to address changing cybersecurity, reliability, and resilience needs of the electric industry. In addition, the SFPUC power infrastructure and customer base continue to grow which over time will result in expanded regulatory oversight. These changes require the NERC Compliance Program as it continues to evolve. The intent of this report is to provide the Commission an overview of the NERC Compliance Program and updates of significant activity that occurred during the 2025 calendar year. NERC encourages annual reporting to governing bodies to engage and build a compliance culture with the intent of achieving a reliable BES. Overview Staffing The NERC/WECC Compliance department includes four Permanent Civilian Service (PCS) positions (currently 2 vacancies) and outside consultants. The consultants provide NERC regulation expertise in Critical Infrastructure Protection (CIP), operations and planning, audit preparedness, procedural document development and review, and advisement on NERC Regulations. The consultants also provide as-needed staff to compenaste for vacancies of SFPUC staff subject matter experts. Implementation of the program requires support from various departments, including HHWP Engineering, HHWP Operations, HHWP Information Technology (IT)/Operational Technology (OT), SFPUC Information Technology Services (ITS), Power Enterprise, and the Functional Registrations The SFPUC is nearing the point at which registration as a Distribution Provider (DP) will be required. This is due to the Bay Corridor Transmission Distribution (BCTD) and the San Francisco International Airport (SFO) increasing peak distribution loads and electrical system protection requirements. The projection to meet the thresholds that would trigger a DP registration are highly dependent upon load growth and could materialize as early as 2030. Expenditures Certain compliance activities are performed by operations and facilities maintenance personnel through the respective operating budgets. However, the NERC Compliance Program is primarily funded through Hetch Hetchy WECC/NERC Compliance Programmatic Project (Project
10025172). The budget in FY 2024-2025 was $5.67 million, while total expenditures were $4.96 million. The FY 2026-2027 budget is $6.37 million.
Program Activities Procedure Review Procedure reviews are a component of the internal controls utilized to mitigate risk of non-compliance. The procedure reviews include 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 are reviewed based upon the procedure review schedule, new or modified Standards, or operational changes within the SFPUC. The program includes 38 Operations and Planning (O&P) and CIP operational procedures used by SFPUC staff. 22 procedures (13 O&P and 9 CIP ) were identified for review or updating in 2025. Due to the 2025 WECC Compliance Audit and personnel changes, 14 of the planned reviews/updates were completed during 2025. The remaining eight reviews/updates will be completed in Spring 2026. Enforcement Actions During 2025, in conjunction with the 2025 WECC Compliance Audit, HHWP self-identified a noncompliance matter which was reviewed by WECC and confirmed as an audit finding. WECC issued a Notice of Compliance Exception resolving this matter with no further actions required. Additionally, during 2025, WECC issued Notices of Compliance Exception resolving each of the remaining three self-reports (one O&P-related enforcement action self-reported in 2021 and two CIP-related enforcement actions self-reported in 2023). No further action is required.
2025 WECC Compliance AuditDuring 2025, WECC performed a 2025 WECC Compliance Audit. The audit included an onsite and virtual component covering an audit period spanning February 22, 2023, through February 14, 2025. The audit scope included a total of eight Requirements (i.e., five Requirements from four CIP Standards and three Requirements from three O&P Standards). The audit findings included: One noncompliance finding (as noted above) One audit recommendation related to automating certain manual processes (e.g., manually tracking software and firmware updates) Two positive observations related to our cold/extreme weather implemented processes In March 2026, WECC provided the final public and the non-public audit reports. Self-Certification In December 2025, WECC notified us that we would be required to complete an Annual WECC Self-Certification process covering calendar year 2025. The self-certification includes a total of three NERC Reliability Standard Requirements (i.e., one Requirement from one CIP Standard and two Requirements from one O&P Standard). The self-certification was completed prior to the due date of March 2, 2026. Line Clearance The SFPUC owns and operates almost 324 miles of 115 kV and 230 kV transmission lines within 134 miles of right-of-way corridor. As part of a 2010 NERC Alert, it was required to identify discrepancies between transmission line design (the physical distance from the transmission line to the nearest hard surface and associated Facility Ratings) and actual field conditions. 233 discrepancies were identified that required mitigation.1 Since 2010, 52% of the identified discrepancies have been remediated (i.e., 109 discrepancies with 124 remaining). The remaining sites will be addressed through a Capital Project utilizing a combination of third party work, and a transmission line clearance mitigation formal contract (DB-139R). Based on the contracting changes and the status of work currently in process, it is ancipated that the remaining clearance issues will be remediated in advance of the previously planned 2040 completion date. Vegetation Management SFPUC has a vegetation management plan (required by NERC) to reduce the risk of surrounding vegetation making contact with powerlines which can result in power disruption or fire. Implementation and monitoring since 1 A discrepancy is defined as a location where the clearance between the conductor and a hard object does 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.
2007, with certain focused activities since 2023, have resulted in removal of all risk categories within the SFPUC right of way. There are 177 trees that pose low risk outside the SFPUC right of way that remain part of the vegetation management plan as part of the continued monitoring program. Summary 2025 Summary During 2025, the regulatory landscape continued to evolve, introducing new/updated risks and related Reliability Standards. Operational procedures and related compliance activities shifted to stay in alignment with these changes. We timely completed all regulatory filings and effectively utilized contractors where necessary to maintain the Compliance Program. The 2025 WECC Compliance Audit was completed and all open enforcement actions were closed. Future Outlook In 2026, the priority regulatory and operational focus areas will include securing the grid against cyber and physical attacks, effectively responding to various types of extreme weather events, maximizing grid capacity, managing generation swings associated with renewables, and managing the load swings associated with large loads. Responding to these priorities will be the at the forefront of Compliance Program activities during 2026 and will require review and revision of existing procedures and implementation of new technology. Engagement with SFPUC ITS and HHWP IT/OT will be required to address grid security. Coordination with Power Enterprise will be required to address large loads and maximizing grid capacity. HHWP Engineering and HHWP Operations will provide detailed support for managing generation swings and maximizing grid capacity. The Compliance Program and SFPUC subject matter experts will require support from areas across the SFPUC bureaus/divisions, management, and consultants to address and respond to these anticipated priorities.