SERC Reliability President and CEO Jason Blake praised the regional entity’s new organizational structure at its inaugural Members Meeting on Wednesday, held prior to the quarterly Board of Directors meeting.

“We feel very confident that this structure is going to serve us all very well, and it’s going to serve you all very well,” Blake said. “It’s going to definitely elevate our game, make sure that we are focused on policy and strategy at the board level and [ensure] that we are … very much tied in with your voice. And this meeting, as well as our other meetings, are the critical vehicle to make sure that you are engaged and have that voice.”

The Members Meeting is a result of a set of amendments to SERC’s bylaws, approved by FERC last year, aimed at creating a “more strategic, efficient and effective governance body.” (See FERC Approves SERC’s Bylaw Changes.) Under the new structure, SERC’s members group includes representatives from each member company that meet at least once a year to advise the board on the business plan and budget, elect independent directors and approve bylaw changes as needed.

The amended bylaws took effect Jan. 1, making this the first board meeting under the new structure. However, board Chair Todd Hillman said that “the timing … actually is intentional,” because meeting in spring gives members the best opportunity to weigh in on the upcoming year’s issues.

The meeting was also the first for the organization’s independent directors, Shirley Bloomfield, Lonni Dieck and Deborah Wheeler. All three were appointed by SERC last October in accordance with the new bylaws, which require between three and five independent directors alongside 15 sector representatives. (See SERC Appoints 1st Independent Board Members.)

Appointments and Approvals

Actions taken at the Members Meeting included rounding out the board with the election of directors to fill two vacant seats in the Cooperatives sector. Roger Clark of Associated Electric Cooperative Inc. was chosen for a term ending June 30, 2022, while Greg Ford of Georgia System Operations was re-elected to serve a term ending June 30, 2023.

The group also approved minor amendments to the organization’s bylaws that would modify the terms of board officers, sector directors and independent directors to begin on June 1, along with establishing the chair as an ex officio, non-voting member of the board’s committees. The board has already confirmed the amendments by written consent; the agreement of the members means they will now be submitted to NERC’s Board of Trustees and then FERC for approval.

Additional appointments by the board include naming Clark to the Human Resources and Compensation Committee; Daniel Case of GridLiance and Glenn Dooley of Duke Energy Florida as chair and vice chair, respectively, of the Operating Committee; and John Greaves of Southern Co. and Carter Manucy of Florida Municipal Power Agency as chair and vice chair of the Critical Infrastructure Protection Committee, respectively.

The board also voted to accept revisions to SERC’s regional delegation agreement (RDA). FERC approved the document conditionally in January, along with RDAs for other REs, but requested that SERC update the agreement to ensure that RE boundaries are consistently described using text instead of maps. (See FERC Provisionally OKs ERO Delegation Agreements.)

Draft Business Plan and Budget OK’d

Finally, the board approved SERC’s draft 2022 business plan and budget. The draft will be submitted to NERC and posted for public comment, with final board approval planned in June and submission to FERC in August.

Reviewing the document at the meeting, SERC CFO and Corporate Treasurer George Krogstie noted that the Finance and Audit Committee is projecting the RE’s spending for 2022 will be $26.7 million, a 3.4% increase from 2021. The RE’s assessment for the year is planned at $24.8 million, up 5.5% from the previous year.

Personnel changes account for the largest share of the budget growth, with four full-time equivalent positions to be added in 2022; the new hires are expected to “drive a stronger and more robust internal [information technology] team.” Increases in pay and employee benefit costs are also expected to drive spending up.

Because the planned 2022 assessment is insufficient to cover the budget, SERC expects to release $1.7 million of its reserves, comprising $500,000 from the working capital reserve and $1.2 million from the assessment stabilization reserve. Krogstie compared this drawdown positively to the 2021 budget, which saw $2.1 million released from reserves.

He noted that the $1.6 million remaining in the working capital reserve will represent 6% of the budget, matching SERC’s target for the reserve. Nearly $2.2 million will remain in the asset stabilization reserves for future offsets, assuming no future penalties are assessed.