Orders

Suite 410, 900 Howe Street P: 604.660.4700 Vancouver, BC Canada V6Z 2N3 TF: 1.800.663.1385 bcuc.com F: 604.660.1102 ORDER NUMBER R-39-18 IN THE MATTER OF the Utilities Commission Act, RSBC 1996, Chapter 473 and An Implementation Plan for Monitoring Compliance with British Columbia Reliability Standards in 2019 BEFORE: W. M. Everett, QC, Commissioner on November 7, 2018 ORDER WHEREAS: A. On October 30, 2018, the Western Electricity Coordinating Council (WECC) submitted the 2019 Implementation Plan for Monitoring Compliance with British Columbia Reliability Standards (2019 Implementation Plan) to the British Columbia Utilities Commission (BCUC) for approval; B. Order G-123-09 approved the Rules of Procedure for Reliability Standards in British Columbia (ROP), including the Compliance Monitoring Program (CMP) appended thereto, setting out the administrative framework for monitoring compliance with adopted Reliability Standards in British Columbia (BC) and most recent revisions to the ROP and CMP were approved by Order R-40-17, dated September 1, 2017. The ROP define terms used in the BC Mandatory Reliability Standards Program which are capitalized in this order; C. Order G-123-09 also appointed WECC as the BCUC’s Administrator to assist the BCUC in carrying out its functions related to Reliability Standards in the manner described in the Administration Agreement between WECC and the BCUC dated October 8, 2009, and renewed August 21, 2014; D. Pursuant to section 3.1 of the CMP, by November 1 of each year, the Administrator will propose an Implementation Plan for the following calendar year for BCUC approval. Once approved, the Implementation Plan is to be posted on the WECC website with appropriate links from the BCUC website and Entities are to be notified electronically that the Implementation Plan has been posted; and E. The BCUC reviewed and considered the 2019 Implementation Plan submitted by WECC, including a list of minimum Reliability Standards to be actively monitored, methods to be used for monitoring, Periodic Data Submittal requirements and an Audit Schedule, and considers approval is warranted. File 59135 | WECC MRS 2019 Implementation Plan 1 of 2

Order R-39-18 NOW THEREFORE pursuant to subsection 125.2(10) of the Utilities Commission Act and section 3.1 of the CMP, the BCUC orders as follows: 1. The 2019 Implementation Plan attached as Attachment A to this order is approved. 2. Entities subject to Reliability Standards in BC must comply with the terms of the 2019 Implementation Plan, unless otherwise ordered by the BCUC. 3. The 2019 Implementation Plan must be posted on the WECC website with links from the BCUC website throughout the calendar year 2019. 4. As new and revised standards are approved by the BCUC and become effective in BC, the revised and additional standards may be added to the Actively Monitored Standards List for monitoring in the same manner as the standards and requirements they are replacing. WECC may expand the scope of a Compliance Audit and make minor changes to schedules or monitoring as required. DATED at the City of Vancouver, in the Province of British Columbia, this 7th day of November 2018. BY ORDER Original signed by: W. M. Everett, QC Commissioner Attachment File 59135 | WECC MRS 2019 Implementation Plan 2 of 2

APPENDIX A to Order R-39-18 British Columbia Utilities Commission (BCUC) Western Electricity Coordinating Council (WECC) 2019 Implementation Plan for Monitoring Compliance with British Columbia Reliability Standards October 30, 2018 1 _____________________________________________________________________________________ 1 of 23

APPENDIX A to Order R-39-18 Table of Contents 1. Introduction and Context ......................................................................................... 3 2. Compliance Monitoring Program Administrator (WECC) ...................................... 4 2.1 WECC Operating Area ..................................................................................... 4 3. 2019 Program Implementation – Monitoring ........................................................... 5 3.1 Compliance Audits ............................................................................................ 5 3.2 Self-Certifications ............................................................................................. 6 3.3 Spot-Checks ..................................................................................................... 6 3.4 Compliance Violation Investigations ................................................................. 7 3.5 Self-Reports ..................................................................................................... 7 3.6 Periodic Data Submittals .................................................................................. 7 4. Reliability Standards Subject to the 2019 Implementation Plan ............................ 8 4.1 Actively Monitored Reliability Standards ........................................................... 8 5. Violation Review Process ........................................................................................ 9 5.1 Initial Review .................................................................................................... 8 5.2 BC Find, Fix, Track Process ............................................................................. 8 5.3 Contents of Notice of Alleged Violation ........................................................... 11 6. Mitigation Plans ...................................................................................................... 12 6.1 Proposed Mitigation Plans .............................................................................. 12 6.2 Implementation of Mitigation Plans ................................................................. 13 6.3 Completion of Mitigation Plans ....................................................................... 13 7. Outreach .................................................................................................................. 13 7.1 Reliability and Security Workshops ................................................................. 14 7.2 webCDMS and EFT Server Training ............................................................... 14 7.3 Open Webinars............................................................................................... 15 7.4 Questions and Answers by Subject Matter Experts ........................................ 15 7.5 Compliance Questions and Answers .............................................................. 15 Appendices Appendix A – Actively Monitored Standards List Appendix B – Audit Schedule 2 _____________________________________________________________________________________ 2 of 23

APPENDIX A to Order R-39-18 1. Introduction and Context The British Columbia Utilities Commission (BCUC) is responsible for monitoring and assessing compliance with approved British Columbia Reliability Standards. The BCUC and the Western Electricity Coordinating Council (WECC or Administrator as noted in the BCUC Rules of Procedure and associated appendices) have entered into an Administration Agreement under which WECC will assist the BCUC in monitoring compliance with Reliability Standards. In accordance with the BCUC/WECC Administration Agreement: • The BCUC grants WECC the authority to act as the BCUC’s Administrator in the administration of the approved Reliability Standards program in British Columbia (BC). This grant of authority is restricted to the actions and obligations specified in the Rules of Procedure, including the Registration Manual, Compliance Monitoring Program, and Penalty Guidelines or as otherwise ordered by the BCUC. • WECC is to submit annually to the BCUC, for review and approval, an Implementation Plan for the following calendar year. The goal of the Implementation Plan is to meet the requirements of the BCUC Rules of Procedure, generally, and those specifically identified in the Compliance Monitoring Program. In the event of any conflict between this Implementation Plan and the Compliance Monitoring Program, this Implementation Plan governs. The WECC staff worked with BCUC staff to develop this annual Implementation Plan, which serves as the operating plan of the Compliance Monitoring Program and identifies the BCUC approved Reliability Standards for which WECC will assist the BCUC to monitor and assess compliance and the methods for monitoring compliance during 2019. Unless directed otherwise by the BCUC: • Reliability Compliance is monitored from each Entity’s Compliance Date, as defined in the Rules of Procedure. The Entity's registration date is not determinative for this purpose. • Any assignment of responsibility for compliance with Reliability Standards requires a valid written notice of assignment be sent to the BCUC with a copy to WECC, transferring responsibility for compliance with the requirement(s), including reporting, to another registered Entity. 3 _____________________________________________________________________________________ 3 of 23

APPENDIX A to Order R-39-18 This Implementation Plan includes references to the Open Access Technology International, Inc. (OATI) Compliance Data Management System (webCDMS) and to the Enhanced File Transfer (EFT) Server currently used by WECC for electronic submittal and distribution of documents. webCDMS is WECC’s primary compliance data system used for compliance monitoring processes. The EFT Server is used as a file upload solution for Audits and Spot-Checks, as well as ad-hoc requests. For convenient reference, webCDMS usage details are available on the WECC website at: https://www.wecc.biz/Pages/Compliance-BritishColumbia.aspx. The EFT Server usage details are available on the WECC website at: https://www.wecc.biz/Reliability/GlobalScape%20Enhanced%20File%20Transfer%20Se rver%20User%20Guide%20-%20Updated%20June%202016.pdf In the event that WECC may designate any other process for submittal of data, information, or communications regarding compliance with Reliability Standards, WECC will provide Entities with prompt notification and appropriate details of the process. 2. Compliance Monitoring Program Administrator (WECC) 2.1 WECC Operating Area 4 _____________________________________________________________________________________ 4 of 23

APPENDIX A to Order R-39-18 3. 2019 Program Implementation – Monitoring WECC Compliance staff will work under the direction of the BCUC to assist with monitoring compliance with the Reliability Standards adopted by the BCUC in a manner consistent with the BCUC Compliance Monitoring Program and the monitoring processes specified therein, as outlined below. Reliability Standards adopted by the BCUC can be accessed from the BCUC website or found using the following link: https://www.wecc.biz/Standards/Pages/Default.aspx 3.1 Compliance Audits WECC will conduct a Compliance Audit of every Entity registered as a Balancing Authority (BA) and/or Transmission Operator (TOP) every three (3) years. All other Entities may be subject to Compliance Audits every six (6) years or as approved by the BCUC. Any portion of a Compliance Audit may be conducted on- or off-site, as determined to be appropriate by WECC. The Audit Schedule is subject to scheduling adjustments. A Compliance Audit generally encompasses the period of three (3) years preceding the start of the Compliance Audit and may not go back beyond the date of the Entity’s last Compliance Audit period. Compliance Audits may include a review of compliance with all Reliability Standards applicable to the Entity. Compliance Audits will review, at a minimum, all applicable Reliability Standards identified in Appendix A under the column marked “Compliance Audit.” Compliance Audits will include a review of any matters subject to a Compliance Violation Investigation in the previous year, as well as the status of Mitigation Plans, Self-Reports, Periodic Data Submittals, and may also include an examination of other items if requested by the BCUC (Note: Periodic Data Submittals will be assessed only for instances of noncompliance). During the Compliance Audit, including any time prior to the Compliance Audit, WECC may expand the audit scope if it determines such an expansion is appropriate. Subject to possible adjustments, the WECC Compliance Audit Schedule for Entities scheduled for Compliance Audits during the program year can be identified in Appendix B. In addition, at least ninety (90) days prior to the commencement of a scheduled Compliance Audit, WECC will: 1) notify the Entity of the Compliance Audit; 2) identify the Compliance Audit Committee members and their recent employment history; and 3) request information. 5 _____________________________________________________________________________________ 5 of 23

APPENDIX A to Order R-39-18 Reliability Standards Audit Worksheets (RSAWs) for those Reliability Standards selected for audit in 2019 will be provided to the Entities with the Notice of Compliance Audit. During the compliance audit engagement, compliance auditors may find areas that are not findings of noncompliance, but is valuable information to the Entity to raise awareness by providing an area of concern or recommendation as described below: • An area of concern is a situation that does not appear to involve a current or ongoing violation of a BC Reliability Standard requirement, but instead represents a situation or practice that could become a violation if not corrected. • A recommendation is a notification to an entity of a situation where there may be opportunity for improving compliance related processes, procedures, or tools. When the draft Audit Report review process is complete, as described in the Compliance Monitoring Program, WECC will provide the final Audit Report to the BCUC and the Entity. The final Audit Report is considered to be accepted by the BCUC thirty (30) days after WECC provides it unless the BCUC directs otherwise. Section 2.1 of the Compliance Monitoring Program provides information about Compliance Audits. 3.2 Self-Certifications Self-Certifications will not be a required component of compliance monitoring during the 2019 Implementation Plan year. Existing monitoring methods may be used by the Administrator to request demonstration of compliance. 3.3 Spot-Checks WECC may perform Spot-Checks at any time. Spot-Checks may be performed either on- or off-site at WECC’s discretion. Spot-Checks may require submission of information by the Entity to WECC. WECC will provide at least twenty (20) days advance notice of a Spot-Check to the Entity and will provide a copy of the notice to the BCUC. The notice will include the reason(s) for the Spot-Check, the Reliability Standards subject to the Spot-Check, and the date the Entity is to submit or otherwise make the required information available to WECC. Section 2.3 of the Compliance Monitoring Program provides information about Spot Checks. 6 _____________________________________________________________________________________ 6 of 23

APPENDIX A to Order R-39-18 3.4 Compliance Violation Investigations After BCUC approval, WECC may perform a Compliance Violation Investigation at any time in response to a system disturbance, Complaint, or Possible Violation of a Reliability Standard identified by any other means, or as otherwise directed by the BCUC. WECC will notify the Entity within three (3) business days of the decision to initiate a Compliance Violation Investigation and the reason(s) for the investigation. Section 2.4 of the Compliance Monitoring Program provides information about Compliance Violation Investigations. 3.5 Self-Reports Entities are encouraged to file Self-Reports with WECC when they become aware of a Possible Violation of a Reliability Standard. An Entity should Self-Report a Possible Violation after it has evaluated the potential non-compliance and determined that an actual violation of a Reliability Standard has occurred and a Self-Report must include details and evidence of the potential non-compliance. Filing a Self-Report is encouraged regardless of whether the Reliability Standard requires reporting on a pre-defined schedule, such as through Periodic Data Submittals. WECC will review Self-Reports and may request that the Entity provide additional clarification or additional information. WECC will notify the Entity of the results of its review in a notification of Find, Fix, Track Processing, Notice of Alleged Violation, or in a notification of Self-Report dismissal. Section 2.5. of the Compliance Monitoring Program provides information about Self- Reporting. The webCDMS Regional Entity Quick Start Guide provides information regarding Self- Report submittals. 3.6 Periodic Data Submittals Some Reliability Standards require the periodic submittal of information to demonstrate compliance with the requirements of the standard. Entities are required to provide to WECC Periodic Data Submittals for all applicable Reliability Standards identified in Appendix A under the column marked “Periodic Data Submittal.” The reporting intervals and timing are contained within the applicable Reliability Standards. WECC will issue a request to the Entity for a Periodic Data Submittal at least twenty (20) days prior to the required submittal date. WECC will review the Periodic Data Submittals and may request the Entity to provide clarification or additional information. If WECC identifies a Possible Violation, then it 7 _____________________________________________________________________________________ 7 of 23

APPENDIX A to Order R-39-18 may (and if directed by the BCUC will), provide the BCUC and the Entity with a notification of Find, Fix, Track Processing or Notice of Alleged Violation, as explained in Section 5 of this Implementation Plan. Section 2.6 of the Compliance Monitoring Program provides information about Periodic Data Submittals. The webCDMS Regional Entity Quick Start Guide provides information concerning the Periodic Data Submittal process. 4. Reliability Standards Subject to the 2019 Implementation Plan Each Entity is responsible for compliance with all Reliability Standards adopted by the BCUC that apply to the functions for which each Entity is registered. However, a subset of those Reliability Standards may be actively monitored as set forth in this Implementation Plan for 2019. 4.1 Actively Monitored Reliability Standards For 2019, WECC will actively monitor, at a minimum, the Reliability Standards identified in Appendix A using the monitoring processes specified in Appendix A. As revisions and additions to Reliability Standards are approved by the BCUC, the revised and additional standards may be added to the Actively Monitored Standards List for monitoring in the same manner as the standards and requirements they are replacing for the appropriate time period. The Actively Monitored Standards List for British Columbia was developed in coordination with the process used for selecting areas of focus recommended by the North American Electric Reliability Corporation (NERC) and WECC. This process incorporates some elements of NERC’s areas of focus by using their annual Compliance Monitoring and Enforcement Implementation Plan on those standards and requirements related to industry and regional perspectives on greater risks to the reliability of the bulk electric system. Entities are responsible for compliance with all BCUC-approved Reliability Standards in effect for their applicable function(s) at all times. 8 _____________________________________________________________________________________ 8 of 23

APPENDIX A to Order R-39-18 5. Violation Review Process 5.1 Initial Review The Administrator will consider all evidence provided in conjunction with a possible non compliance with a Reliability Standard and will proceed as follows, unless ordered otherwise by the Commission. 5.1.1 If the Administrator considers that there is no evidence to substantiate a Possible Violation, no further process applies and the Administrator will notify the Entity and the Commission that the Possible Violation is dismissed and no further action is required. 5.1.2 If the Administrator identifies a Possible Violation as one that may be processed under the BC Find, Fix, Track (FFT) Process, the Administrator will follow the BC FFT Process described in section 4.2 of the Compliance Monitoring Program. 5.1.3 If the Administrator identifies a Possible Violation as one that may not be processed under the BC FFT Process, the Administrator will follow the Alleged Violation Process in section 4.3 of the Compliance Monitoring Program. 5.1.4 If a Possible Violation has been identified and considered under one monitoring process, the Administrator will not review the same occurrence if it is subsequently identified as a Possible Violation under another monitoring process unless it appears that significant additional information is available. If significant additional information is available, the scope of a Possible Violation may be expanded. 5.2 BC Find, Fix, Track Process The Commission may approve alterations to the BC FFT process if such alterations appear to present material benefits for furthering reliability objectives and promoting administrative efficiencies in the BC MRS Program. Alterations to the BC FFT Process may be included in the annual Implementation Plan or otherwise approved by the Commission. 5.2.1 The Administrator will perform an FFT review on a Possible Violation before considering following the Alleged Violation process. 5.2.2 Unless the Commission orders that other factors are to be considered, the Administrator will consider the following in performing an FFT review: 9 _____________________________________________________________________________________ 9 of 23

APPENDIX A to Order R-39-18 1) The underlying facts and circumstances (i.e., what happened, how, why, where and when); 2) The specific Reliability Standard(s) possibly violated; 3) Whether the Entity has mitigated or begun mitigation of the Possible Violation or not. A Mitigation Plan for a Possible Violation in the BC FFT Process generally requires the expected mitigation completion be within three (3) months of submittal. 4) The Administrator’s assessment of potential and actual level of risk to reliability, including mitigating factors during the period of non-compliance; 5) Information that the Administrator may have about the perceived strength of the Entity’s compliance program, including preventive and corrective processes and procedures, internal controls and culture of compliance; 6) Information that the Administrator may have about the Entity’s compliance record; and 7) Whether aggravating factors are present. 5.2.3 The Administrator will notify the Commission and the Entity in writing that it will follow the BC FFT Process. If, within thirty (30) days after that notice is sent, either: (a) the Commission directs the Administrator to proceed under any other process, or (b) the Entity provides a written request to the Administrator, with a copy to the Commission, requesting that the Alleged Violation process be followed instead, then the Administrator will instead follow the Alleged Violation process or such other process the Commission may direct. 5.2.4 Unless the Commission orders otherwise, Possible Violations that are processed under the BC FFT Process will not be processed as Alleged Violations and will not become Confirmed Violations. A Possible Violation resolved through the BC FFT Process will not be classified as a contravention under the Act and will not attract administrative penalties. However, the existence of earlier Possible Violations that have been resolved through the BC FFT Process will be part of the Entity’s compliance history that may be considered by the Commission in determining penalties for other contraventions for the Entity. 5.2.5 Mitigation information is an important consideration of whether a Possible Violation is considered for the BC FFT Process. Nonetheless, if a Possible Violation included in the BC FFT Process has not yet been mitigated, the Entity must submit a Mitigation Plan to the Administrator, or a description of how the Possible Violation has been mitigated, within thirty (30) days after the 10 _____________________________________________________________________________________ 10 of 23

APPENDIX A to Order R-39-18 Administrator notifies the Entity that it will follow the BC FFT Process. The provisions of section 5.0 of the Compliance Monitoring Program dealing with Mitigation Plans are applicable. 5.2.6 In order for a Possible Violation to be considered as resolved through the BC FFT Process, an Entity must provide an Attestation acceptable to the Administrator describing the remediation work completed. 5.2.7 The Commission will consider a Possible Violation matter closed when the Administrator reports it to the Commission as a Remediated FFT Issue, unless the Commission provides notice to the Administrator and the Entity at any time that further review will be required. 5.2.8 The Administrator will report items processed as FFTs to the Commission within thirty (30) days of notifying an Entity of an FFT. 5.2.9 If at any point it appears to the Commission that Remediated FFT Issue status was achieved on the basis of a material misrepresentation of facts, the Commission may direct the Administrator to reprocess the matter as an Alleged Violation. The duration of the Alleged Violation may be considered to begin with the original start date of what had been considered to be a Remediated FFT Issue. Particulars of misrepresentation may be considered by the Commission in determining any sanctions that the Commission may determine to be applicable. 5.2.10 The Commission may publish status reports including the name of Entities with Possible Violations in the BC FFT Process or Remediated FFT Issues and details of the nature of the Possible Violations and Remediated FFT Issues, unless disclosure relates to a cyber-security incident or would jeopardize the security of the bulk power system. 5.2.11 If the Administrator identifies a Possible Violation as not one that the Administrator would approach as an FFT under the BC FFT Process, the Alleged Violation process described in section 4.3 of the Compliance Monitoring Program would proceed. 5.3 Contents of Notice of Alleged Violation If WECC concludes, based on the facts and circumstances, that evidence exists to indicate an Entity has violated a Reliability Standard, WECC will issue a Notice of Alleged Violation (NOAV) to the BCUC and the Entity’s Compliance Contact. WECC will treat a NOAV as confidential. 11 _____________________________________________________________________________________ 11 of 23