NERC CEO Jim Robb’s virtual attendance during last week’s Texas Reliability Entity quarterly governance meetings gave stakeholders an opportunity to clear up a bit of confusion: Why were wind farms and solar facilities excluded from the Department of Energy’s and NERC’s requests for data on the bulk power system’s exposure to “foreign adversaries”?

Following President Trump’s executive order in May that sought to restrict the purchase of BPS equipment from suppliers suspected of connections with foreign adversaries, DOE in July published a request for information and NERC followed by issuing a Level 2 alert seeking to gather data. (See NERC Issues Level 2 Supply Chain Alert.)

NERC’s request, however, focused on Chinese- and Russian-manufactured substation equipment. Solar and wind facilities were not included.

“It was just priorities,” Robb said during the Texas RE Board of Directors meeting Thursday. “We focused on the major bulk power supply elements. We wanted it to be a manageable response.”

Robb said NERC is contemplating a second alert that may focus on distributed control systems. In the meantime, it is preparing a report that will be submitted to FERC later this month.

“We really don’t know if we’ll find a lot of stuff on the grid from adversarial governments, or a little,” he said. “Based on conversations with DOE, mitigation will be strategic and risk-informed. No one should be worried about a broad rip-and-replace of this equipment.”

Robb also complimented the industry for its response to the coronavirus pandemic.

“We’ve had pandemic plans, but not for what we’re having now,” he said. “[NERC] issued an all-points bulletin the first week of February, when we first started getting stories of events in [China] and travel restrictions. We were first worried about supply chains, but that was followed by a NERC alert the second week of March, when we dusted off our pandemic plans. Then it became obvious we had to send everyone home.

“We thought we’d be back the first week of April. Six months later, there’s no end in sight,” Robb said.

The result, he said, has been a “living guide” for the electric industry.

“The whole ecosystem came together the way you would want it to,” Robb said. “We can now turn our attention to the post-COVID world. One thing I know is that it won’t be like what we left behind.”

PUC to Consider Reliability Monitor Rule Change

Public Utility Commission Chair DeAnn Walker told the board that the commission in September will likely adopt a rule that broadens the pool of candidates eligible to serve as the ERCOT wholesale market’s reliability monitor.

The Texas RE currently fills that role, in addition to its responsibilities for NERC compliance. However, the proposed rule change strikes language that the reliability monitor be independent from the grid operator and not subject to its supervision “with respect to its monitoring and investigative activities” (50602).

“The changes are intended to give the commission more latitude in who they can choose to perform that contract,” Walker said, adding that the measure will likely be taken up during the PUC’s Sept. 24 open meeting.

The Texas Office of Public Utility Counsel and Texas Industrial Energy Consumers both filed comments supporting the change. The OPUC said expanding the pool of eligible candidates would introduce more competition and ultimately lower costs for residential and small commercial consumers.

TIEC said it “makes sense” to provide the PUC with the flexibility to select “the right entity … as circumstances warrant.” It suggested the commission take precautions to ensure that if ERCOT becomes the reliability monitor, that it “appropriately segregate” the department from its operational side.

ERCOT declined to take a position but did suggest retaining the existing requirement that it and the PUC contract with the reliability monitor when the commission’s selected monitor is an entity other than itself. The grid operator said that would ensure “the parties will more specifically detail their respective obligations and expectations.”

Voluntary Return to Office for Some Staff

Up to half of Texas RE’s staff will be allowed to return to its Austin office on Tuesday, CEO Lane Lanford said. He said the decision to return is voluntary, given the uncertainty around schools being open and local restrictions.

“We’ll make plans from there for the next quarter,” Lanford said. He said having 20 people in the office at a time would be a “safe number for us to shoot at.”

Staff have been able to maintain their responsibilities while working from home. Working remotely during the second quarter, the reliability monitor opened eight compliance investigations, compared to 12 in the previous two quarters.

Committee Selects Ex-DHS, CIA Counsel as Director

The Nominating Committee said it has unanimously agreed to select former Department of Homeland Security Undersecretary Suzanne Spaulding as its next independent director. If approved, her term would begin in January.

Spaulding is a senior adviser for homeland security and director of the Defending Democratic Institutions project at the Center for Strategic and International Studies (CSIS). As the undersecretary for the DHS’ National Protection and Programs Directorate from 2011 to 2017, Spaulding managed a $3 billion budget and 18,000 employees charged with strengthening cybersecurity and protecting the nation’s critical infrastructure.

During six years at the CIA, Spaulding was assistant general counsel and legal adviser to the director’s Nonproliferation Center. She also served as general counsel for the Senate Select Committee on Intelligence and minority staff director for the House Permanent Select Committee on Intelligence.

Board, MRC Approves Bylaw Changes

The board and Member Representatives Committee both approved bylaw revisions that give the board more flexibility in scheduling the annual membership meeting. The board is currently required to schedule the meeting each December.

The revisions also add an emergency governance section to the bylaws, allowing a smaller quorum of voting directors during a “catastrophic event” that keeps a majority of the nine directors from being able to “readily participate” in a meeting. The revision requires at least two independent directors be among the three or more voting directors present.

The changes will be presented to the membership for a vote in late September or early October.

The board also approved BKD’s audit report of Texas RE’s 2019 financial statements. The audit had no reported findings.