NERC 2013 Business Plan and Budget Overview. May 3, 2012

Transcription

1 NERC 2013 Business Plan and Budget Overview May 3, 2012

2 NERC 2013 Business Plan and Budget Budget Planning Background Goals and Priorities Challenges Business Planning Framework Key Deliverables and Resource Drivers 2013 Projections Next Steps Schedule 2 RELIABILITY ACCOUNTABILITY 2

3 Background In 2010 NERC initiated a multi-year business planning and budgeting process Develop long-term goals and assumptions 3-year budget projections 2013 goals and deliverables updated to reflect prioritized focus on reliability, stakeholder feedback 2013 plan and budget remain on track 3 RELIABILITY ACCOUNTABILITY

4 Strategic Goals Standards and compliance Develop clear, reasonable, technically sound standards in a timely and efficient manner Strong, independent and fair enforcement authority Promote culture of compliance Identify significant risks to reliability Prioritize risks, develop solutions, monitor results Accountable for mitigation of risk Promote culture of reliability excellence Coordination and collaboration Transparency, consistency, efficiency, cost effectiveness 4 RELIABILITY ACCOUNTABILITY

5 Focusing on Priorities Issuing new and revised standards Improving enforcement efficiency and productivity Identifying significant reliability risks Training and education Improving ERO processes and efficiency 5 RELIABILITY ACCOUNTABILITY

6 Challenges Improving the standards development process Focusing on reliability risk and delivery of results Continuing to improve the compliance enforcement framework, focus and processes Identifying and addressing critical infrastructure protection priorities Addressing regulatory mandates 6 RELIABILITY ACCOUNTABILITY

7 Business Planning Framework Develop strategic goals, objectives and common assumptions Review existing resource needs and operating costs Project 2013 cost of current operations Identify 2013 incremental resource requirements and costs Develop projections for RELIABILITY ACCOUNTABILITY

8 Key Deliverables and Resource Drivers Standards Work with industry to implement standards process improvements to address efficiency, timeliness and effectiveness Continue development of risk-based standards focused on key reliability outcomes, including support for 3-year development plan Meet regulatory obligations for standards development and revisions and reduce directives backlog Implement improvements in project management of standards development projects 8 RELIABILITY ACCOUNTABILITY

9 Key Deliverables and Resource Drivers Compliance Operations Develop a compliance trial program which provides an opportunity for mitigation while achieving compliance, as well as an opportunity to validate compliance measures and procedures Develop risk-based compliance monitoring approaches to maximize reliability benefits and improve efficiencies Continue education programs regarding effective compliance programs and risk controls Improve Regional Entity oversight 9 RELIABILITY ACCOUNTABILITY

10 Key Deliverables and Resource Drivers Enforcement Achieve efficiency by focusing on cases having the most significant impact on reliability Sustain and expand Find, Fix, Track, and Report process Reduce prior caseload Identify the causes and trends in violations 10 RELIABILITY ACCOUNTABILITY

11 Key Deliverables and Resource Drivers Reliability Assessment and Performance Analysis Revised definition of Adequate Level of Reliability Analyze emerging risks to reliability Develop risk control strategies Support for standards development process and response to FERC directives Subject to final regulatory action, finalize Bulk Electric System (BES) exception and consequential load loss exception processes 11 RELIABILITY ACCOUNTABILITY

12 Key Deliverables and Resource Drivers Event Analysis and Investigations Use of more sophisticated cause codes for analysis Refinement of risk-based methodologies Provide timely publication of lessons learned Refine the criteria and process for self-analysis of events and disturbances 12 RELIABILITY ACCOUNTABILITY

13 Key Deliverables and Resource Drivers Situation Awareness Ongoing SAFNR support of FERC, Regional Entity and stakeholder needs Respond to increased number of occurrences requiring analysis Managing a consistent program for issuing NERC alerts 13 RELIABILITY ACCOUNTABILITY

14 Key Deliverables and Resource Drivers Human Performance Conduct semi-annual Human Performance workshops Facilitate the transfer of best practices, lessons learned and industry innovations Identify opportunities and methods for improvement Improve human performance components of bulk power system reliability 14 RELIABILITY ACCOUNTABILITY

15 Key Deliverables and Resource Drivers Critical Infrastructure Protection Increase support for CIP aspects of Regional Entity audit oversight Support to Standards, Training, ESCC, CIP Working Groups Enhance BPS threat and vulnerability information sharing through ES-ISAC 15 RELIABILITY ACCOUNTABILITY

16 Key Deliverables and Resource Drivers Training Expand training and education programs Standards Lessons learned Risks, trending, common causes Effective root cause analysis Reduce human performance errors Upgrade SOCCED database 16 RELIABILITY ACCOUNTABILITY

17 Key Deliverables and Resource Drivers Information Technology Common, enterprise-wide technology platform Data warehouse design Enhanced disaster recovery Laptop backup application Phase II of the NERC public website upgrade Enhance or replace applications 17 RELIABILITY ACCOUNTABILITY

18 Highlights of 2013 Projection Projected $3.7M reduction in cost of current operations Projected new funding of $4.6M No additional working capital funding currently contemplated $933K (1.8%) overall increase in operating costs and capital expenditures Below forecast in 3-year plan 18 RELIABILITY ACCOUNTABILITY

19 2013 Projected Cost of Current Operations 2012 Base Operating Budget 2013 Projected Change in Base Operating Budget Projected 2013 Base Operating Budget $ 33,005,812 Total Personnel Expense $ (2,239,576) $ 30,766,236 $ 3,872,780 Total Meeting Expense $ 50,000 $ 3,922,780 $ 8,287,314 Contracts and Consultants $ (1,699,467) $ 6,587,847 $ 7,174,276 Operating Expenses $ 215,743 $ 7,390,019 $ - Non-Operating Expenses - $ - $ 772,090 Capital Expenditures $ - $ 772,090 $ 53,112,272 Total Base Operating Budget $ (3,673,300) $ 49,438, RELIABILITY ACCOUNTABILITY

20 2013 Incremental Resource Requirements and Costs Projected 2013 Base Operating Budget Projected inc(dec) in Staffing and Programs $ 30,766,236 Total Personnel Expense $ 1,100,474 $ 3,922,780 Total Meeting Expense $ - $ 6,587,847 Contracts and Consultants $ 1,934,500 $ 7,390,019 Operating Expenses $ 150,000 $ - Non-Operating Expenses $ 772,090 Capital Expenditures $ 1,421,100 $ 49,438,972 Total Base Operating Budget $ 4,606, RELIABILITY ACCOUNTABILITY

21 Total Projected 2013 Budget Increase Total Projected Increase 2013 v 2012 Budget Total Projected 2013 Budget $ (1,139,102) -3.5% Total Personnel Expense $ 31,866,710 $ 50, % Total Meeting Expense $ 3,922,780 $ 235, % Contracts and Consultants $ 8,522,347 $ 365, % Operating Expenses $ 7,540,019 $ - Non-Operating Expenses $ - $ 1,421, % Capital Expenditures $ 2,193,190 $ 932, % Total Base Operating Budget $ 54,045, RELIABILITY ACCOUNTABILITY

22 Total Projected 2013 Staffing by Program Area Total Headcount by Program Area STATUTORY Total Headcount 2013 Budget New Positions* Operational Programs Reliability Standards Compliance Operations and Organization Registration Compliance Enforcement, Reporting, Tracking and Analysis Events Analysis and Investigations Reliability Assessments and Performance Analysis Training, Education and Operator Certification Situation Awareness 6.50 Critical Infrastructure Protection Total Headcount Operational Programs Total Headcount Administrative Programs Total Headcount * New positions in 2012 and/or RELIABILITY ACCOUNTABILITY

23 Recap of Cost Increases and Funding requirements Change in Funding Requirement 2013 v 2012 % of Total 2012 Budget Current Operations $ (3,673,300) -6.9% Proposed 2013 Resource additions $ 4,606, % Total Funding Requirement $ 932, % Increase (Decrease) in 2013 Assessment Due to current operations $ (3,673,300) Due to proposed resource additions 4,606,074 Due to change in other funding sources 250,000 Due to Penalty Offset (2,412,508) Use of Working Capital-SOCCED Database (250,000) % of 2012 Assessments Total $ (1,479,734) -2.9% 23 RELIABILITY ACCOUNTABILITY

24 Next Steps Schedule May 8 May 8 FAC Meeting; Discussion of Working Capital and Contingency Operating Reserve Guidelines MRC Meeting; Presentation of first draft of NERC 2013 Business Plan and Budget May 18 Comments due on first draft of NERC Business Plan and Budget May 18 FAC web-x to review draft Regional Entity Business Plans and Budgets May 25 NERC posts second draft of Business Plan and Budget; will include 3-year projections 24 RELIABILITY ACCOUNTABILITY

25 Next Steps Schedule June 25 Comments due on second draft of NERC Business Plan and Budget July 19 FAC web-x to review final Regional Entity Business Plans and Budgets Aug. 15 FAC meeting to approve final NERC, Regional Entity Business Plan and Budgets and assessments Aug. 15 Board of Trustees meeting to approve final NERC BP&B, Regional Entity BP&Bs and assessments Aug. 24 Submit ERO BP&B and assessments to FERC for approval and file with Canadian authorities 25 RELIABILITY ACCOUNTABILITY

26 DISCUSSION 26 RELIABILITY ACCOUNTABILITY