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Agenda

NPCC 1 December 7, 2016

Northeast Power Coordinating Council, Inc.

2016 General Meeting

“Reliability Challenges”

Hotel Omni Mont-Royal 1050 rue Sherbrooke Ouest Montreal, Quebec H3A 2R6

Tel. (514) 284-1110.

1:00 PM to 5:00 PM – Wednesday, December 7, 2016

Welcome & Opening Remarks

Sylvain Clermont, Director, Reliability Standards and Regulatory Compliance,

Hydro-Québec TransÉnergie

Harvey Reed, NPCC Chairman of the Board

Edward A. Schwerdt, NPCC President & CEO

Distributed Energy Resources Integration Brian Evans-Mongeon

President and CEO, Utility Services Inc. Vice Chair, NERC Planning Committee

BREAK

Cyber & Physical Security Resiliency Brian Harrell

Director of Security and Risk Management Navigant Energy

2016/2017 Natural Gas Outlook Stephen Leahy

Vice President, Policy Northeast Gas Association

Closing Remarks Philip A. Fedora, Assistant Vice President of Reliability Services

NPCC

Northeast Power Coordinating Council, Inc. (NPCC)

Antitrust Compliance Guidelines It is NPCC’s policy and practice to obey the antitrust laws and to avoid all conduct that unreasonably restrains competition. The antitrust laws make it important that meeting participants avoid discussion of topics that could result in charges of anti-competitive behavior, including: restraint of trade and conspiracies to monopolize, unfair or deceptive business acts or practices, price discrimination, division of markets, allocation of production, imposition of boycotts, exclusive dealing arrangements, and any other activity that unreasonably restrains competition.

It is the responsibility of every NPCC participant and employee who may in any way affect NPCC’s compliance with the antitrust laws to carry out this commitment.

Participants in NPCC activities (including those participating in its committees, task forces and subgroups) should refrain from discussing the following throughout any meeting or during any breaks (including NPCC meetings, conference calls and informal discussions):

• Industry-related topics considered sensitive or market intelligence in nature that are outside of their committee’s scope or assignment, or the published agenda for the meeting; • Their company’s prices for products or services, or prices charged by their competitors; • Costs, discounts, terms of sale, profit margins or anything else that might affect prices; • The resale prices their customers should charge for products they sell them; • Allocating markets, customers, territories or products with their competitors; • Limiting production; • Whether or not to deal with any company; and • Any competitively sensitive information concerning their company or a competitor.

Any decisions or actions by NPCC as a result of such meetings will only be taken in the interest of promoting and maintaining the reliability and adequacy of the bulk power system.

Any NPCC meeting participant or employee who is uncertain about the legal ramifications of a particular course of conduct or who has doubts or concerns about whether NPCC’s antitrust compliance policy is implicated in any situation should call NPCC’s Secretary, Ruta Skucas at 202-530-6428.

Distributed Energy Resources

Brian Evans-Mongeon

Utility Services, Inc.

Vermont, USA

Some upfront facts:

• DSOs don’t exist per se, but do they?• 2000 public power entities• 900 cooperatives• 300 investor owned

• Control Areas by any other name:• 275 Balancing Areas• 100 Reliability Coordinators

• Jurisdictional enterprises• 48 States • 7 Provinces

• TSOs:• Ten (7 in US, 3 CA)

• NERC:• 8 Reliability regions • 4 Interconnection Areas

• Federal Governments• Two

• And a partridge in a pear tree (Baja California of Mexico)

Seeking to ensure:

Culture of ReliabilityCulture of Resiliency

Culture of Security

Culture of Reliability

Essential Reliability Service Fundamentals

Reliability “Building blocks” Accentuated by resource changes Partly covered through ancillary services Accommodate local/regional needs

Resource Adequacy

Essential Reliability Services

Reliability

Changing Mix

Page 6

0

10

20

30

40

50

60

70

80

90

100

19902000

20102020

Typical

Coal Nuclear Gas Hydro Other

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

19902000

20102020

Some Regions

Coal Nuclear Gas Hydro Other

2015 2016 2017 2018 2019 2020 2021BTM Solar PV 3,695 4,903 5,976 7,054 8,146 9,309 10,385

0

2,000

4,000

6,000

8,000

10,000

12,000

MW

Estimated Behind the Meter Solar PV Build-out through 2021

Frequency Support

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.4

2.6

2.8

3

3.2

3.4x 10

5

2010 2011 2012 2013 2014 2015 2016 2017

Kin

etic

ene

rgy,

MW

s

at max wind penetration, historic

at max wind penetration, projected based on SGIAs

∗ at max wind penetration, projected based on SGIAs and FCs

Page 8

Ramping

Page 9

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

Hourly

Net

Load

Ramp

s, MW

Yearly 1-Hour Ramp Distribution

-14,000-12,000-10,000-8,000-6,000-4,000-2,000

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

Hourl

y Net

Load

Ram

ps, M

W

Yearly 3-Hour Ramp Distribution

Voltage

Page 10

Voltage Control & Reactive Support

- Maintain voltage within tolerable range

- More local

Where are we and what’s next?

This year:

Final Report on DERTF

Next:

PC and OC Acceptance

NERC MRC Endorsement

NERC BOT Approval

Page 11

Culture of Resiliency

Distributed Energy Resources

Distribution Levels of Gen increasing:

DG and Storage

Solar and Wind

Demand Response and DSM Aggregators

Shifting power transfer between Distribution and Bulk Power System

TDI – Transmission Distribution Interface

Sourcing vs. Sinking

Modeling capabilities exist within current standards

Page 13

Permission granted by Holger Weichmann, EnBW

Culture of Security

What are the risks/benefits?

• System integrations

• Internet of Things

• Third Party Aggregators

Final Touches

Pendulum swinging back to distributed localized planning

Need to assure continuity of the essential reliability services to maintain grid integrity

Look for opportunities and working solutions in rural environments

Need to balance localized and central facilities

Build in protections to ensure customer safety

After all, we are here to have people plug things in and turn the lights on

Brian Evans-MongeonPresident and CEOUtility Services, Inc.

(802) [email protected]

www.utilitysvcs.com

Waterbury & Stowe, VT – home of world renown ice cream, beer, chocolate, maple syrup, cheese, apples, coffee, and NERC compliance.

mailto:[email protected]

http://www.utilitysvcs.com/

/ ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED1

BRIAN HARRELL, CPP

DIRECTOR OF SECURITY AND RISK

MANAGEMENT

PHYSICAL AND CYBERSECURITY

RESILIENCE IN 2017-2018

NPCC GENERAL MEETING

MONTREAL 2016

/ ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED2 / ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED2

AGENDA

1. A Look to the Near Future…

2. Cybersecurity Predictions

• Ransomware

• Removable Media and the Dreaded USB Drive

• Protecting Data Through Awareness

• Low Impact Compliance Date

3. Physical Security Predictions

• Beyond CIP-014

• The Good, Bad, and Ugly – Drones

• Non-Nuclear Generation Protections

• Security Convergence

• A Rising Tide Lifts All Boats


SECURING REMOTE AND URBAN

ASSETS

The Real Challenge (physical)…


Over 55,000

Substations

over 100 Kv in

size!


LIMITING REMOTE ACCESS AND

SCADA (IN)SECURITY!

The Real Challenge (Cyber)…


CYBERSECURITY


CROWN JEWELSRansomware

• Malicious software designed to block access to a computer system until a

sum of money is paid

• Ransomware is a growth industry

• Paying the Ransom? Business continuity vs. security

• Prevention

• Patches and updates

• Avoid falling victim to phishing emails

• Regular backups


CROWN JEWELSRemovable Media and the Dreaded USB Drive

• Do not trust! Don’t plug or insert untrusted media into

your computer

• Throw away the conference freebie

• Think of USB sticks like toothbrushes

• If you must, use encrypted devices

* A U.S. study earlier this year found that nearly half of 297

USB sticks placed randomly around a university campus

were picked up and inserted into computers


CROWN JEWELSProtecting Data Through Awareness

• Employees, contractors and vendor partners will become

more aware that the data on their computers and mobile

devices are valuable and vulnerable

• Automate a cybersecurity awareness program

• Direct benefit to your overall security posture

• 2015 Data

Breaches Report

• CIP-011, V5


CROWN JEWELSLow Impact Compliance Date

• April 1, 2017, is the effective date that Low Impact Assets

are required to meet compliance

• Over 1,000 new entities will be required to comply with the

new CIP-003 requirement that mandates policies in cyber

security awareness, physical access controls, electronics

access controls and cyber security incident response

• Most of these entities have never had to comply with NERC

CIP


PHYSICAL SECURITY


CROWN JEWELSBeyond CIP-014

• CIP-014 will target approximately 1,000-1,500 critical

substations across North America

• As new substations are brought on, security protections

should be implemented as a forethought

• Any physical attack will be propelled into media scrutiny

• Substations that don’t meet the criteria for CIP-014

compliance, but are system or business critical, will start

to receive threat and vulnerability assessments and added

security mitigation measures designed to deter, detect

and delay potential attackers


CROWN JEWELSThe Good, Bad, and Ugly - Drones

• Applications continue to evolve at an exponential rate

• Have many legitimate and cost effective uses for many

industries, including electricity

• Have been utilized by terrorist organizations

• Are being the subject of intense manipulation and

invention for both commercial and sinister use “killer

drones”


CROWN JEWELSNon-Nuclear Generation Protections

• April 16, 2013 – What if?

• Add security mitigation measures designed to deter,

detect and delay potential attackers

• Ready for the knee-jerk reaction?

• Utilities recognize non-nuclear generation is a “soft target”


• Bringing together different security silos into one combined Org

• A significant number of breaches are occurring due to internal

threats

• Physical security technology uses IT systems and platforms

• Departments should collaborate to ensure physical access is

linked closely with logical access to computers and network

resources

• A company’s cyber infrastructure, NERC CIP program, and

industrial control systems rely on physical security mitigation

measures to keep systems inaccessible to physical threats

• Security Convergence requires leadership and political will

• The need to make risk-based decisions dictate an integrated

approach to security management

Security Convergence


• Investor owned utilities (IOU), with help from industry trade

associations, will push the industry towards greater physical

security protections at critical sites

• GridEx IV

• Government will look towards the Electricity ISAC for industry

subject matter expertise

• Renewed interest from the US Department of Homeland Security

• Do you have a utility neighbor program?

• The two-minute elevator speech

• Be mindful of reputational risk, talking points at the ready…

• We know threat actors are coming! Success will be determined

by how we proactively look at these threats and defend against

them

A Rising Tide Lifts All Boats


Closing


BRIAN HARRELL, CPPDirector of Security and Risk Management

703.965.7474

[email protected]

Twitter: @gridsecure

Blog: Securing the Spark

navigant.com

CONTACT

mailto:[email protected]

http://www.csoonline.com/blog/securing-the-spark/

2016/17 Natural GasOutlook

The Northeast Power Coordinating CouncilGeneral Meeting

Stephen Leahy

Northeast Gas Association

December 7, 2016

Montreal, Quebec

1.

About NGA

Non-profit trade association

Local gas utilities (LDCs) serving New England, New York, New Jersey, Pennsylvania

Several interstate pipeline companies

LNG importers (Distrigas, Repsol) and LNG trucking companies

Over 250 “associate member” companies, from industry suppliers and contractors to electric grid operators

www.northeastgas.org 2.

NGA’S ANTITRUST COMPLIANCE PROCEDURES

Adopted by the NGA Board of Directors on June 4, 2003

Objective

The Northeast Gas Association (NGA) and its member companies are committed to full compliance with all laws and regulations, and to maintaining the highest ethical standards in the way we conduct our operations and activities. Our commitment includes strict compliance with federal and state antitrust laws, which are designed to protect this country’s free competitive economy.

Responsibility for Antitrust Compliance

Compliance with the antitrust laws is a serious business. Antitrust violations may result in heavy fines for corporations, and in fines and even imprisonment for individuals. While NGA’s attorneys provide guidance on antitrust matters, you bear the ultimate responsibility for assuring that your actions and the actions of any of those under your direction comply with the antitrust laws.

Antitrust Guidelines

In all NGA operations and activities, you must avoid any discussions or conduct that might violate the antitrust laws or even raise an appearance of impropriety. The following guidelines will help you do that:

Do consult counsel about any documents that touch on sensitive antitrust subjects such as pricing, market allocations, refusals to deal with any company, and the like.

Continued on NGA web site…

http://www.northeastgas.org/about-nga/antitrust-guidelines 3.

Copyright: Northeast Gas AssociationPrepared by: NovaraMarch 2015

M&NE

PNGTS

Iroquois

Tennessee

Algonquin

5.

Dominion

Columbia

Transco

Millennium

National

Fuel &

Empire

TransCanada

Texas

Eastern

Stagecoach

Winter Outlook

Storage levels in positive position

U.S. gas production bit lower this year –while Marcellus continues high output

LNG imports to region higher

Commodity price higher than last year but still in $3/Mcf range

Looking ahead, weather, as always, is the biggest variable in supply/price dynamic

6.

Storage is Strong

Source: U.S. EIA, data released 11-18-10

U.S. natural gas storage levels as

of November 12 were 3.843 Tcf,

9% above the 5-year average

U.S. gas production levels up

about 2.5% in 2010

Source: U.S. EIA, data released 10-29-10,

through Aug. 2010

U.S. natural gas storage levels are just under 4 Tcf,

6% above 5-year average. Source: U.S. EIA, 12-1-16 7.

Price: Recent History

Source: U.S. EIA, 11-9-10Source: U.S. EIA, 12-1-168.

Sourc

e:

U.S

. EIA

, 7-1

4

“Nearby” Production

7.

U.S. natural gas production in 2015 set new all-time record: ~75 Bcf/d.

Marcellus Shale currently producing 18 Bcf/d.

PA is now 2nd largest gas producing state in U.S.9.

Marcellus: Largest U.S. Gas

Resource Base

Source: U.S. EIA, 4-15 10.

Canadian Gas Exports to

Region

11.

0

200

400

600

800

1000

1200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bcf

Source: National Energy Board, Canada. *2016 data through Sept.

Canadian Natural Gas Exportsto Eastern U.S., 2007-16

*

LNG Volumes Imports by New

England-Based Terminals

12.

0

20

40

60

80

100

120

140

160

180

200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*

Bcf

/year

Source: U.S. Dept. of Energy/Fossil Energy, 11-16. * 2016 data thru Sept.

LNG Imports, NE Terminals, 2004-2016

Distrigas NE Gateway Neptune

Canaport LNG Deliveries

13.Chart: Repsol, based on Repsol and Ventyx. Gas volumes in Dth.

LNG Developments

• Gaz Métro is tripling its liquefaction capability at its E. Montreal plant

from 3 to 9 Bcf/yr – project expected to be completed this month.

• Eversource proposing to increase LNG storage capacity in

southeastern MA from 0.5 Bcf of storage to 6.8 Bcf, as part of the

“Access Northeast” project

• Northeast Energy Center (NEC) is a FERC regulated LNG

liquefaction, storage and vaporization project proposed to be located

in central MA and connected to Tennessee Gas Pipeline. The project

sponsors are affiliates of Liberty Utilities and Northstar Industries.

• State of Maine issued RFP this fall for proposals to increase LNG

storage to enhance “electrical and natural gas reliability in the State.”

• As of Sept. 2016, for this current year the U.S. has exported 106 Bcf

of LNG, imported 64 Bcf.14.

Northeast States Lead U.S. in

Gas Efficiency Investments

9 Northeast states = $544 million investment in 2015

Equal to 39% of U.S. total of $1.4 billion

Source: ACEEE, “2016 State Energy Efficiency Scorecard”, released Sept. 2016

15.

16.

Gas Customer Base in Region

Continues to Grow

Natural Gas = +1 million Heating Oil = -1.4 Million

New Sendout Records Set in

Mild Recent Winter

• New England gas LDCs

set a new sendout

record of 4 Bcf on Feb.

14, 2016 (a Sunday)

• New York State set a

new record for gas

demand on Feb. 13,

2016 of 6.6 Bcf

• Gas utilities

experiencing rising

design day demand

17.

Projected Power Sector

Additions by Fuel Type

18.

Natural Gas, 53

Other, 7

Wind, 40

GENERATOR PROPOSALS IN THE

ISO NEW ENGLAND QUEUE

Percentage, Sept. 2016

0

1,000

2,000

3,000

4,000

5,000

6,000

Natural Gas Dual Fuel Wind Other

NEW YORK ISO SYSTEM, 2016

Proposed Power Projects by Fuel Type

Megawatts

PJM, 2015

Queued Capacity by Fuel Type,

Percentage

Gas = approx. 65%

Coordination with

Power Systems

NGA maintains joint Electric-Gas Operating Committee with 3 ISOs in region

Good communication between ISOs and pipeline control rooms

Firm vs. non-firm transportation arrangements well-understood at this point

19.

Constraints

20.

Growing Opposition to Energy

Infrastructure

21.

Pipeline Reversals

Fall 2015:

U.S. government denies permit for Keystone oil pipeline from Canada

April 2016:

Kinder Morgan suspends Tennessee’s proposed “Northeast Energy Direct”

project in New England market

April 2016:

NY Dept. of Environment denies water permit for Constitution Pipeline

(proposal approved by FERC in 2014)

August – October 2016:

MA Supreme Judicial Court rules against EDCs contracting for gas pipeline

capacity; RI PUC puts proposal on hold; NH PUC rules against – “it is an

approach that, in practice, would violate New Hampshire law following the

restructuring of the electric industry”

Fall 2016:

U.S. government temporarily halts construction on Dakota Access oil pipeline

in North Dakota 22.

Source: Bloomberg News article, 11-16 23.

Proposed Projects in

Region

24.

Delays at the State

Review Process

Dominion’s New Market Project:

To serve National Grid gas utility in

upstate NY; received FERC certificate,

awaiting permits from NY DEC

Tennessee’s CT Expansion:

To serve three natural gas utilities in CT,

approved by FERC, awaiting permits

from MA DEP

25.

Comments

• Gas utilities in region continue to see growth on

systems and to plan infrastructure investments to

meet that growth.

• Natural gas continues to be essential part of

region’s power system – and will balance / enable

increasing renewable additions.

• Additional pipeline infrastructure needed to meet

demand; projects in development; siting challenges

on the increase.

26.

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