NERC-led Review Panel Decision on the Request of City of Pasadena Water and Power

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1 NERC-led Review Panel Decision on the Request of City of Pasadena Water and Power The North American Electric Reliability Corporation (NERC)-led Review Panel (Panel) has completed its evaluation of the City of Pasadena Water and Power s (Pasadena or City), NERC Compliance Registry (NCR) ID Number NCR05090, request to (1) deactivate its registration from the NERC Compliance Registry as a Transmission Owner (TO), and (2) resolve a dispute regarding whether Pasadena must register as a Transmission Planner (TP). In its request, Pasadena asserted that its limited transmission Elements are not material to the reliability of the Bulk Electric System (BES) and, therefore, Pasadena should not be registered as either a TO or a TP. As explained below, the Panel determined that Pasadena has a material impact on BES reliability and denies Pasadena s request to deactivate its TO registration. The Panel also concluded that Pasadena is required to register as a TP in accordance with the NERC Rules of Procedure (ROP) Section This letter provides a brief background on the Panel and the City, a procedural history regarding Pasadena s request, a Panel discussion regarding whether Pasadena is material to the BES, and a conclusion. Panel Background Pursuant to the NERC ROP, Appendix 5A, NERC established a Panel comprised of a NERC lead with Regional Entity participants to evaluate requests for Deactivation of, or decisions not to register, an entity that meets Sections I through IV of the Registry Criteria or requests to add an entity that does not meet (i.e., falls below) the Registry Criteria, as well as disputes regarding the application of Sections I through IV of the Registration Criteria and requests for a sub-set list of applicable Reliability Standards. 2 The goal of this Panel is to maintain consistency and oversight in the Electric Reliability Organization (ERO) Enterprise 3 registration decisions. Upon receiving a request, the Panel follows the process detailed in Appendix 5A and uses the preponderance of the evidence as the standard of proof when reviewing a request. 4 Entity Background and Procedural History Entity Background Pasadena is located to the northeast of Los Angeles, California. The City owns and operates an electric utility 1 NERC ROP Section , provides: Ensure that all transmission Facilities of the Bulk Power System are the responsibility and under the control of one and only one Transmission Planner, Planning Authority, and Transmission Operator. 2 NERC ROP, Appendix 5A, available at 3 NERC uses the term ERO Enterprise to encompass both NERC and the eight Regional Entities. 4 NERC ROP, Appendix 5A, Section III.D.8.d.

2 with a peak demand of approximately 307 MW and provides electricity to approximately 65,000 residential, commercial, and industrial customers. Pasadena is electrically surrounded by and interconnected with Southern California Edison Company (SCE). Pasadena owns the T.M. Goodrich Receiving Station (Goodrich), which includes interconnection points with two SCE 220 kv Lines, Gould and Laguna Bell, a 220 kv ring bus with five circuit breakers, and all associated equipment, controls, protective relays and communications facilities. Pasadena s distribution system is served from Goodrich where it is stepped down to 34 kv for delivery to Pasadena s end-use customers via three 220 kv/34 kv parallel transformers. Pasadena and SCE have an Interconnection Agreement, FERC Rate Schedule Number 484, effective August 5, 2010, that governs the terms and conditions of this interconnection. The Interconnection Agreement specifies that: SCE shall operate and maintain, at Pasadena s expense, the Pasadena Interconnection Facilities as T.M Goodrich Receiving Station including, but not limited to, power and control cables within the 220 kv switchyard, overhead power lines and appurtenances between the 220 kv switchyard and the high-voltage side bushings of the 220/34 kv transformers, and all equipment related to the operation of the 220 kv portion of the receiving station including relay protection, synchronizing and control schemes, alarms, telemetry, and revenue metering. In addition, Pasadena owns and operates 177 MW of internal generation that is connected to Pasadena s distribution system at 34 kv. These resources are bid into the California Independent System Operator (CAISO) markets, where Pasadena s load is balanced. Pasadena is typically a net importer of power and does not usually export generation to the BES, except as directed by the CAISO. Pasadena is located within the Western Electricity Coordinating Council (WECC) region of the ERO Enterprise and has been listed on the NERC Compliance Registry as a Distribution Provider (DP) and Resource Planner (RP) since June 17, 2007, and as a TO since August 18, Although Pasadena is not currently registered for the TP function, through a November 1, , WECC informed Pasadena that all TOs situated in the WECC region must identify an associated TP or become registered as a TP. Therefore, as of the effective registration dates, Pasadena is responsible for complying with all NERC Reliability Standards that have been approved by the Federal Energy Regulatory Commission (FERC) and are applicable to DPs, RPs, and TOs. Panel Request On December 23, 2016, Pasadena submitted an application to the Panel to review its request to deactivate as a TO and determine whether Pasadena is required to register as a TP. Pursuant to the NERC ROP, NERC notified the entities that have Pasadena within their respective scope of responsibility regarding Pasadena s request, and allowed each the opportunity to provide information supporting or opposing Pasadena s request. Specifically, NERC notified the: Regional Entity, WECC City of Pasadena Water and Power 2

3 Reliability Coordinator (RC), Peak Reliability Corporation (Peak) Balancing Authority (BA), CAISO Planning Authority/Planning Coordinator (PA/PC), CAISO Transmission Operator (TOP), SCE and CAISO 5 In support of its request, Pasadena provided the Panel a December 30, 2016 letter describing the City s facilities, providing an analysis of the NERC Registry Criteria, and addressing three of the four materiality factors set forth in the materiality test in Appendix 5B. 6 Pasadena contended that it is not material to the reliability of the BES and, therefore, should not be registered as either a TO or TP. The following documents were attached to the letter: January 9, 2008 letter regarding Jointly-Owned Transmission Facilities Compliance with NERC Reliability Standards Interconnection Agreement between Pasadena and SCE T.M. Goodrich Receiving Station Single Line Diagram 220 kv/34 kv correspondence from WECC to Pasadena regarding requirements for entity functional mapping correspondence between SCE and Pasadena regarding misoperations reporting for BES Protection Systems 2015 SCE Annual Transmission Reliability Assessment correspondence from Pasadena to SCE regarding its subtransmission system model and load forecast Attachment A - Analysis of TO Requirements that are not also DP Requirements Attachment B Analysis of TP Requirements On February 8, 2017, Pasadena supplemented its December 30, 2016 letter with information intended to support Attachment A concerning FAC-008-3, and Attachment B concerning TPL Pasadena contends that SCE develops the facility ratings for Pasadena and that SCE includes the T.M. Goodrich 230 kv equipment as part of their Transmission Plan. Assessments Received On February 17, 2017, assessments were provided to the Panel by Peak and CAISO. SCE and WECC provided assessments on February 21, 2017 and March 16, 2017, respectively. 5 There is a Coordinated Functional Registration (CFR) for the TOP function between SCE and CAISO (CFR00009). 6 Pasadena did not address the materiality factor regarding the impact of its BES Cyber Systems. City of Pasadena Water and Power 3

4 Peak s initial assessment on February 17, 2017 stated it was neutral on the matter. However, on March 28, 2017, Peak provided an updated assessment and asserted: Peak completed review of the information provided and believes the identified Transmission Elements described are critical to the Bulk Electric System. Peak would not object to the City of Pasadena deregistering as a Transmission Owner (TO), provided another entity is registered as the TO for the facilities in question. Until such time, Peak opposes the request for TO deregistration. CAISO assessed Pasadena s request as follows: The ISO is not opposed to City of Pasadena Water and Power deactivating its Transmission Owner function and [not] registering as a Transmission Planner. If there will be no Transmission Planner registered for their BES facilities, then the ISO would need to further evaluate and understand the impacts to its ability to perform the Planning Coordinator function. SCE s initial assessment on February 21, 2017 stated: SCE is neutral with Pasadena s request to deregister with NERC as a Transmission Owner. However, we note that the City of Pasadena owns BES assets at its Goodrich substation and SCE will not assume any NERC compliance responsibility for these assets not covered by the SCE-Pasadena Reliability Standards Agreement, which only covers the Transmission Operator function. SCE provided an updated assessment on March 16, 2017, which included the following supplemental information regarding Pasadena s request: SCE remains neutral on the City of Pasadena, Department of Water & Power s [Pasadena] request to NERC to deregister as a Transmission Owner (TO). However, after reviewing the supplemental information provided, SCE has concerns that NERC will expect SCE to assume TO responsibilities on behalf of [Pasadena] for BES assets they own at their Goodrich Substation. As noted in my February 21, 2017 letter to you on this subject, SCE will not assume any TO responsibilities on behalf of [Pasadena] for BES assets they own at Goodrich Substation. As the owner of the assets, [Pasadena] is the responsible party for complying with NERC Reliability Standard Requirements (if any) applicable to the TO functional registration for those assets. While [Pasadena] correctly notes their 220/34.5 kv Banks are non-bes, the No.2 Bank North and South 220 kv CBs 422 and 622 parallel two BES buses thus SCE considers the circuit breakers themselves as part of the BES and subject to NERC Reliability Standards. SCE also described an agreement regarding compliance with the NERC Reliability Standards, the Pasadena SCE Reliability Standards Agreement (RSA), effective on August 3, This agreement explicitly identifies compliance responsibilities between SCE and [Pasadena], and states, WHEREAS, Pasadena is the City of Pasadena Water and Power 4

5 owner of Pasadena s 220 kv System, SCE will not register as the Transmission Owner ( TO ) or the Transmission Planner ( TP ) nor will SCE assume the role of Transmission Owner or Transmission Planner for Pasadena s 220 kv System. WECC s March 16, 2017 assessment concludes that Pasadena s request to be deregistered for the TO function should be denied and states that Pasadena should be registered as a TP. Regarding the TO function, WECC s assessment states that Pasadena meets the functional definition of a TO by virtue of its ownership of Transmission Elements. WECC concluded the breakers and bus bar at the T.M. Goodrich Receiving Station provide a critical BES connection between SCE s two 220kV BES transmission lines and should be considered as critical to the BES. WECC also explains that if Pasadena is deregistered for the TO function, there will be a reliability gap relative to the following Reliability Standard requirements related to: Facility Connection Requirements, Transmission Vegetation Management, the Analysis and Mitigation of Transmission and Generation Protection System Misoperations, and Transmission and Generation Protection Maintenance and Testing. On the TP function, WECC asserted that Pasadena should be registered as a TP based on the NERC ROP, Section , which states: Ensure that all transmission Facilities of the Bulk Power System are the responsibility and under the control of one and only one Transmission Planner, Planning Authority, and Transmission Operator. On April 7, 2017, Pasadena provided a response to the letters from WECC dated March 16, 2017 and Peak dated March 28, In its response, Pasadena addressed two fundamental points from the WECC and Peak letters. First, Pasadena argues that both WECC and Peak Reliability s determination are heavily or solely based on the functional definition of Transmission Owner and contends that its functional registration is immaterial to the reliability of the Bulk Electric System because of the overlap in Reliability Standards applicable to Pasadena as a Distribution Provider. Second, Pasadena argues that WECC s gaps analysis inaccurately reflects Reliability Standards that will continue to be applicable to Pasadena as a registered Distribution Provider as well as Reliability Standards that do not currently apply to Pasadena. Further, Pasadena contends that Peak Reliability did not identify any gaps or identify their reason for developing their opinion and that WECC did not identify why they believe a gap would exist with a change. Pasadena also provided arguments against the gaps identified by WECC regarding facility connection requirements, transmission vegetation management, and protection systems (analysis and mitigation of misoperations and maintenance and testing). Panel Discussion The Panel met on April 25, 2017 to evaluate Pasadena s request to deactivate as a TO, and to determine whether Pasadena should be registered as a TP. The Panel convened again on May 10 and May 25, 2017, and reviewed the evidence. The Panel evaluated Pasadena s materiality to the BES by considering evidence City of Pasadena Water and Power 5

6 in light of the materiality test 7 and the Risk-Based Registration (RBR) Implementation Guidance, 8 as discussed in detail below. Materiality Test The NERC ROP, Appendix 5B provides for an entity who otherwise meets the registration criteria to be excluded from registration if the entity can show that it does not have a material impact on the reliability of the BES: Similarly, the Regional Entity may exclude an organization that meets the criteria described above as a candidate for Registration if it believes and can reasonably demonstrate to NERC that the BES owner, operator, or user does not have a material impact on the reliability of the BES. Such decisions must be made in accordance with Section V of Appendix 5A to the NERC ROP. In order to ensure a consistent approach to assessing materiality, a non-exclusive set of factors ( materiality test ) for consideration is identified below; however, only a sub-set of these factors may be applicable to particular functional registration categories[.] The Panel reviewed this materiality test when assessing Pasadena s request. The Panel s consideration of each element of the test is explained below. Is the entity specifically identified in the emergency operation plans and/or restoration plans of an associated Reliability Coordinator, Balancing Authority, Generator Operator or Transmission Operator? Pasadena stated that it is not identified in the emergency operating plans and/or restoration plans of an associated RC, BA, Generator Operator (GOP) or TOP. The Panel confirmed Pasadena s statement with Peak, CAISO and SCE. Will intentional or inadvertent removal of an Element owned or operated by the entity, or a common mode failure of two Elements as identified in the Reliability Standards (for example, loss of two Elements as a result of a breaker failure), lead to a reliability issue on another entity s system (such as a neighboring entity s Element exceeding an applicable rating, or loss of non-consequential load due to a single contingency). Conversely, will such contingencies on a neighboring entity s system result in Reliability Standards issues on the system of the entity in question? Regarding Pasadena s request to deactivate its TO registration, the Panel concluded that Pasadena has not demonstrated that its 220 kv Goodrich Station, including the 220 kv ring bus, five 220 kv breakers and associated Protection Systems, and which interconnects with two 220 kv SCE Lines (Gould and Laguna Bell), does not have a material impact on BES reliability. 7 The materiality test is found in the NERC ROP, Appendix 5B, Notes to the Registry Criteria in Sections I-V, available at 8 RBR Implementation Guidance (Dec. 2016), available at City of Pasadena Water and Power 6

7 Pasadena s December 30, 2016 letter states: Pasadena does not have reason to believe that the intentional or inadvertent removal of any of its distribution system facilities could result in or contribute to a reliability issue on another entity s system, such as ratings to be exceeded or loss of non-consequential load, and the Interconnection Agreement includes provisions relating to mitigation of impacts on SCE and Pasadena facilities. The Panel noted that Pasadena did not perform a study, assessment, or provide evidence to support its claim. Additionally, Pasadena s materiality claim is based solely on its distribution system facilities at Goodrich; does not address the impact of inadvertent removal of its 220 kv facilities at Goodrich, such as the common mode failure of two Elements as a result of a breaker failure; and does not address the impact of contingencies on a neighboring entity s system. On Pasadena s related request to not register as a TP, the City, in its December 30, 2016 letter, and in reference to its 220 kv BES transmission facilities, made a presumption that this equipment is already considered within the regional transmission plan. Nonetheless, Pasadena acknowledged that: SCE does not serve as the Transmission Planner for Goodrich. SCE confirmed this and asserted in its March 16, 2017 letter that SCE will not register as the Transmission Owner ( TO ) or the Transmission Planner ( TP ) nor will SCE assume the role of Transmission Owner or Transmission Planner for Pasadena s 220 kv System. The Panel concluded that Pasadena has not provided adequate justification for its claim because it was based solely on a presumption that SCE s TP analysis included its BES facilities. The Panel also concluded SCE has explicitly not accepted that responsibility for performing the TP function. The Panel further concluded that while the model used by SCE to perform its planning assessment included the Pasadena 220 kv facilities, modeling these facilities is appropriate and consistent with SCE s obligations as a TP. Accurately modeling neighboring transmission facilities in the power system model is a necessary action for the TP to perform accurate studies. However, modeling a neighboring entity s facilities neither transfers compliance responsibility to that entity nor obviates the need for the neighboring entity to register for and perform the TP function for its own BES Facilities, as suggested by Pasadena. As noted above, Pasadena did not submit studies to determine its material impact such as analyzing the inadvertent removal of the 220 kv facilities at Goodrich, the common mode failure of two Elements as a result of a breaker failure, or the impact on Pasadena of contingencies on a neighboring entity s system. Accordingly, the Panel did not have a technical basis to determine that Pasadena does not have a material impact on the reliability of the BES. However, the Panel considered other evidence. Specifically, the Panel reviewed the statements from Peak and WECC concerning Pasadena s material impact on the BES. Peak, the RC for the WECC region, stated in its March 28, 2017 assessment that it believes the identified Transmission Elements described are critical to the Bulk Electric System. Peak s assessment was persuasive to the Panel due to its role as the highest level of authority in the WECC region who has the wide area view of the BES and has the tools, processes and procedures to ensure the reliable operation of the BES. Similarly, in its March 16, 2017 assessment, WECC stated that it determined the breakers and bus bar at the T.M. Goodrich Receiving Station provide a critical BES connection between SCE s two 220 kv BES transmission lines and that these facilities should be considered as critical to the BES. The Panel also considered WECC s assessment persuasive due to its role as the compliance monitoring and enforcement authority with unique WECC-regional perspectives. These statements from the two highest reliability authorities in the WECC City of Pasadena Water and Power 7

8 region support the Panel s determination that the Goodrich Station is critical to the BES and, therefore, has a material impact to BES reliability. Can the normal operation, misoperation or malicious use of the entity s cyber assets cause a detrimental impact (e.g., by limiting the operational alternatives) on the operational reliability of an associated Balancing Authority, Generator Operator or Transmission Operator? Pasadena s December 30, 2016 letter does not address the impact of or make any reference to its BES Cyber Assets. However, the Panel confirmed through a data request to Pasadena that its BES Cyber Assets at Goodrich are categorized as low impact pursuant to CIP Attachment 1. Can the normal operation, Misoperation or malicious use of the entity s Protection Systems (including UFLS, UVLS, Special Protection System, Remedial Action Schemes and other Protection Systems protecting BES Facilities) cause an adverse impact on the operational reliability of any associated Balancing Authority, Generator Operator or Transmission Operator, or the automatic load shedding programs of a PC or TP (UFLS, UVLS)? Pasadena s December 30, 2016 letter states that it owns BES protective relays, communication equipment, including wave traps, and interconnection metering equipment at Goodrich Station. As stated above, the Panel found that Pasadena s 220 kv system, which serves as a connection between two 220 kv SCE BES transmission lines, has a critical importance to BES reliability. Accordingly, the Panel concluded the normal operation, Misoperation or malicious use of Pasadena s Protection Systems could cause an adverse impact on the operational reliability of an associated BA or TOP due to the critical nature of Goodrich. RBR Implementation Guidance The Panel also considered the RBR Implementation Guidance when reviewing whether Pasadena is material to the BES. 9 The Panel s review of each element of the guidance is addressed below. Does the registered entity have unique characteristics in relation to the electrical characteristics of the system, the system topology, critical Loads or facilities, or facilities associated with a major metropolitan area (e.g., New York City, Washington DC, etc.) that could potentially have an adverse reliability impact resulting from intentional or inadvertent operations, misoperations, or malicious use on the entity s assets? The Panel concluded that Pasadena does not have unique characteristics in relation to the electrical characteristics of the system that could potentially have an adverse reliability impact. Does the entity have real-time authoritative control of BES Elements? The Panel concluded that Pasadena does not have real-time authoritative control of BES Elements. CAISO and SCE have authoritative control of Pasadena s BES Elements at Goodrich. 9 RBR Implementation Guidance (Dec. 2016), available at City of Pasadena Water and Power 8

9 Will the aggregate effect of eliminating functional registrations and/or reducing the compliance obligations (i.e. subset list of Standards/Requirements) for an entity within a portion of or across the BES result in a potential Adverse Reliability Impact to that portion of the BES (e.g., where multiple entities considered individually are not necessary for the Reliable Operation of the system, but in aggregate the entities are material)? The Panel is not recommending eliminating functional registrations. Is the registered entity a participant in a Joint Registration Organization (JRO), Combined Functional Registration (CFR), or other agreement impacting materiality? Pasadena is not a participant in a JRO or CFR. There are two relevant agreements with SCE: the Interconnection Agreement, referenced above in the Panel Request section; and the Reliability Service Agreement, referenced above in the Entity Background section. Is the registered entity currently registered under other functional registrations? If yes, provide a list of all current registered functions. Pasadena is currently listed on the NERC Compliance Registry as a DP and RP since June 17, 2007, and has been registered as a TO since August 18, Has the Submitting Entity received and provided supporting letters/data (agreement or disagreement) from the applicable Regional Entity(ies), RC, BA, PA, and TOP that have (or will have upon registration of the entity) the entity whose registration status is at issue within their respective scope of responsibility? If yes, provide copies of the supporting documentation. The Regional Entity, RC, BA, PA and TOP positions are considered in the evaluation of all NERC-led Panel decisions. The Panel appreciates the assessments submitted by WECC, Peak, CAISO and SCE. As explained in the Assessments Received section above, CAISO and SCE were not opposed to the request for TO deactivation. However, CAISO expressed concern regarding its ability to perform the Planning Coordinator function if there is no TP for Goodrich. SCE stated that while the RSA covers the TOP function for Pasadena, it does not include the TO or TP functions. Further, SCE stated it is concerned that NERC will expect SCE to assume TO responsibilities on behalf of [Pasadena] for BES assets they own at their Goodrich Substation. Peak believes the Pasadena facilities are critical to the Bulk Electric System and opposes the request for TO deregistration unless another entity registers as the TO for Pasadena. Similarly, WECC believes Pasadena s facilities should be considered as critical to the BES, opposes the request for TO deactivation, and recommends TP registration. City of Pasadena Water and Power 9

10 In addition, WECC also disputes Pasadena s claim that it does not own any Transmission lines that are 100 kv or above and as such the BES definition does not apply and Pasadena does not meet the definition of a TO. 10 WECC argued that while Pasadena may not own transmission lines, it owns Transmission Elements that meet the BES definition. The Panel reviewed WECC s assessment and the BES definition, which states the BES includes all Transmission Elements operated at 100 kv or higher and Real Power and Reactive Power resources connected at 100 kv or higher. The Panel concluded that the BES definition is not restricted to transmission lines, and that the 220 kv Goodrich Station qualifies as BES since it includes Transmission Elements operated at 100 kv or higher (and is not modified by the list of Exclusions). In its request to the Panel, Pasadena made a similar claim that it does not own or operate major transmission lines, substations, or other transmission assets. The Panel did not accept this claim since Pasadena owns a 220 kv switching station that has been declared critical by both Peak and WECC, and which includes a 220 kv ring bus that serves as an interconnection point with two SCE 220 kv transmission lines. The Panel also reviewed Pasadena s April 7, 2017 response to the Peak and WECC assessments. Pasadena contends that the Peak and WECC assessments are heavily or solely based on the function definition of a Transmission Owner, and further argues that its TO registration is not required due to overlap in the Reliability Standards applicable to Pasadena as a Distribution Provider. The Panel did not find Pasadena s arguments persuasive. First, the NERC ROP Appendix 5A, Section II Introduction to Organization Registration and Organization Certification Processes, states All industry participants responsible for one or more of the functions below must register for each function through the Organization Registration Program. The NERC ROP does not contemplate or allow for entity Registration to be limited due to any potential overlap in Standards applicable to different functions. Entities are required to register for each function they are responsible for. Second, the Panel reviewed Pasadena s Analysis of TO Requirements that are not also DP Requirements 11 and supplemental analysis. 12 While the TO analysis shows several TO Standards and Requirements that are not applicable to Pasadena, 13 the Panel was not persuaded that reliability gaps would not exist if Pasadena s request to deactivate it TO registration was accepted. In particular, Pasadena s analysis presented regarding the applicability of the Facilities Design, Connections and Maintenance Reliability Standards was not adequately justified. Regarding FAC-008-3, the City s TO Standards analysis explains that Pasadena has developed Facility Ratings to comply with this Standard. However, in its supplemental analysis, Pasadena reverses that position and states SCE conducts Facility Ratings and SCE maintains the facility ratings at Goodrich. The Panel was concerned that these 10 Pasadena s Registration Change Request Form submitted to WECC dated April 27, 2016 and included in Pasadena s application to the Panel. 11 Attachment A Analysis of TO Requirements that are not also DP Requirements, a spreadsheet of TO Requirements and associated explanation to support Pasadena s contention that its DP registration will not result in any reliability gaps. 12 Pasadena s February 8, 2017 letter containing supplemental arguments regarding FAC and TPL For instance, Pasadena contends that CIP-14-2, R1 R6 is not applicable to Goodrich; MOD R3 is not applicable since it does not own a synchronous condenser; PER R2 R4 is not applicable since Pasadena personnel do not operate BES transmission elements; among others. City of Pasadena Water and Power 10

11 inconsistent statements show a potential reliability risk due to this ambiguity regarding the development of a facility ratings methodology and the implementation of accurate facility ratings for Goodrich. In addition, the Panel noted that the RSA does not include the TO function, and SCE has stated that it will not assume TO responsibility for Pasadena. Regarding FAC-001-2, Requirements R1 and R2, Pasadena contends that A third party interconnection at this location would most likely need to utilize the interconnection processes of SCE and CAISO. The Panel concluded that while SCE and CAISO would certainly be involved in analysis of any third party interconnection requests that does not remove Pasadena s compliance obligation as the owner of Goodrich to have Facility Interconnection requirements available, regardless of the likelihood of the request. Similarly, Pasadena s analysis presented to the Panel regarding the Modeling, Data, and Analysis Reliability Standards was not persuasive. Specifically, MOD-032-1, R2 and R3 requires Pasadena to have steady-state, dynamics and short circuit modeling data for its BES facilities at Goodrich. However, Pasadena stated that it does not have the information required by this Standard. The Panel is concerned that Pasadena s statement that it does not have the information required is a potential reliability risk. The Panel also reviewed Pasadena s April 7, 2017 response regarding its argument that WECC s gaps analysis is inaccurate. The Panel concurs that Vegetation Management does not apply to Pasadena. However, as stated above, the Panel has concerns about Facility Connection requirements. In regards to Protection Systems (analysis and mitigation of misoperations and maintenance and testing), the Panel, as stated above, determined that the NERC ROP does not contemplate or allow for entity Registration to be limited due to any potential overlap in Standards applicable to different functions. As such, Pasadena is required to adhere to Standards applicable to Protection Systems due to its responsibilities as a TO. In summary, for the reasons stated above, the Panel recommends that Pasadena s request to deactivate its TO registration be denied. Regarding its request to not name a TP for Goodrich, the Panel reviewed Pasadena s TP Standards analysis 14 and supplemental analysis. 15 The Panel focused its review on TPL-001-4, and as stated above, concluded that SCE has explicitly not accepted the responsibility to perform the TP function for Pasadena. In addition to similar comments from SCE in its assessment to the Panel, the supplemental analysis included a February 3, exchange between SCE and an agent for Pasadena which contained the following statement from SCE: In answer to the questions that you posed to SCE (shown below in red), please remember that we are not [Pasadena s] Transmission Planner. We have a Reliability Standards Agreement in-place between [Pasadena] and SCE that governs the TOP functions and an Interconnection Agreement that governs operations and maintenance functions that SCE performs on behalf of [Pasadena]. 14 Attachment B Analysis of TP Requirements, a spreadsheet of TP Requirements and associated explanation to support Pasadena s contention that its DP registration will not result in any reliability gaps. 15 Pasadena s February 8, 2017 letter containing supplemental arguments regarding FAC and TPL City of Pasadena Water and Power 11

12 Pasadena s TP Standards Analysis for TPL mentions a transmission upgrade project contained in SCE s transmission plan which, among other things, is proposed to change the configuration of the Goodrich to Laguna Bell 220 kv transmission line. Pasadena states as follows: Pasadena engineers were not required to participate in the study, and therefore Pasadena s reasonable assumption is that a transmission planning gap does not exist. The Panel was not satisfied by Pasadena s rationale that a transmission planning gap does not exist because their engineers did not participate in SCE s planning study. The Panel concluded that whether or not Pasadena s engineers participated in SCE s study does not address whether appropriate analysis has been conducted on Pasadena s BES facilities pursuant to TPL In addition, actions taken by SCE to fulfill its obligations as a TP has no bearing on the need for Pasadena to register as a TP for its facilities. As both Peak and WECC have determined that Goodrich is critical to reliability, the Panel determined that any potential transmission planning gap exists only due to Pasadena not being registered as a TP. Therefore, in accordance with NERC ROP Section , Pasadena is required to register for the TP function or may voluntarily enter into an agreement with another entity to perform the responsibilities of the TP function on their behalf. Conclusion As explained above, upon consideration of the request, information received, and supporting documentation, the Panel determined the following: Pasadena s request to deactivate its TO registration is denied. Pasadena s request that a TP does not need to be named for Goodrich is denied. Therefore, Pasadena is required to: Register for the TP function, or Alternatively, enter into a voluntary agreement with another entity to perform the responsibilities of the TP function on behalf of Pasadena. City of Pasadena Water and Power 12