Board 8: Chief Executives Meeting SEPTEMBER 2016 COLORADO SPRINGS, CO Edison Etectric I TIT 2016 Fall Board and Chief Executives Meeting Schedule of Events September 6-8, 2016 The Broadmoor   Colorado Springs, Colorado Wireless Access Code: EEI2016 Tuesday, September 6 10:00 a.m. – 6:00 p.m. EEI Office 12:00 p.m. – 6:00 p.m. Registration 6:00 p.m. – 9:00 p.m. Welcome Reception and Dinner McGrew Room West Lobby Reg. Desk Cheyenne Lodge (Buses to Cheyenne Lodge will be available from the West Building entrance, beginning at 5:45 p.m. A continuous shuttle will be available from Cheyenne Lodge to the West Building until 9:30 p.m.) Wednesday, September 7 7:00 a.m. – 5:00 p.m. EEI Office and Registration 7:00 a.m. – 8:30 a.m. Executive Committee Breakfast West Ballroom A/B 7:00 a.m. – 8:30 a.m. NEI Government Affairs Advisory Committee Louis Stratta Room 7:30 a.m. – 8:30 a.m. Conference Breakfast 8:00 a.m. Spouse/Guest Program Activity   Board of Directors Strategic Discussion 8:30 a.m. – 8:45 a.m. Strategic Planning Update 8:45 a.m. – 9:15 a.m. SPEAKER: Chairperson Ellen Nowak, NARUC Executive Committee Member and Wisconsin Public Service Commission 9:15 a.m. – 9:30 a.m. Distribution Planning: The View from Abroad 9:30 a.m. – 11:00 a.m. CEO Panel on Grid Modernization 11:00 a.m. – 12:00 p.m. Clean Energy 12:00 p.m. – 2:00 p.m. Rocky Mountain C/D 8:00 a.m. Continental Breakfast – Crystal Room (Main Building) 8:30 a.m. sharp – Depart for Seven Falls 8:30 a.m. – 12:00 p.m.     Rocky Mountain Foyer Rocky Mountain A/B Sustainability Reporting Baseload Generation Distributed Generation Coal Ash Conference Luncheon Rocky Mountain C/D EEI Tony Anthony Member Unity Awards ELECTION DIALOGUE Haley Barbour, former chairman, Republican National Committee and former governor of Mississippi; and Stephanie Cutter, Democratic strategist, deputy campaign manager for President Obama in 2012, and partner, Precision Strategies 2:00 p.m. – 4:30 p.m. Board of Directors Strategic Discussion Rocky Mountain A/B 2:00 p.m. – 2:30 p.m. SPEAKER: Sean McGarvey President, North America’s Building Trades Unions 2:30 p.m. – 4:00 p.m. CEO Panel on Customer Solutions 4:00 p.m. – 4:30 p.m. Miscellaneous Reports    Volkswagen Settlement OSHA Report/Robocall Decision Veterans in Energy 4:30 p.m. – 5:30 p.m. SPP CEO Meeting 5:30 p.m. – 7:00 p.m. Conference Reception West Ballroom C/D Lake Terrace Dining Room Thursday, September 8 7:00 a.m. – 1:00 p.m. EEI Office and Registration Rocky Mountain Foyer 7:00 a.m. – 8:30 a.m. PJM CEO Breakfast West Ballroom C/D 7:30 a.m. – 8:30 a.m. Institute for Electric Innovation Management Committee Breakfast West Ballroom A/B 7:30 a.m. – 8:30 a.m. Conference Breakfast Rocky Mountain C/D 8:30 a.m. – 11:00 a.m. Board of Directors Strategic Discussion Rocky Mountain A/B 8:30 a.m. – 9:00 a.m. Business Session 9:00 am. – 9:45 a.m. Reliability and Business Continuity 9:45 a.m. – 10:15 a.m. SPEAKER: Commissioner Colette Honorable Federal Energy Regulatory Commission 10:15 a.m. – 11:00 a.m. SPEAKER: Josh Linkner, Technology Entrepreneur: “The Road to Reinvention” 11:00 a.m. Buffet Luncheon 12:00 p.m. – 5:30 p.m. E-ISAC Member Executive Committee 1:00 p.m. – 5:00 p.m. CIO EAC Meeting Mountain View Terrace Divide Room Rocky Mountain C 8/26/2016 10:52 AM Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Ellen Nowak Commissioner, NARUC Executive Committee Member and Wisconsin Public Service Commission Ellen Nowak was first appointed to the Wisconsin Public Service Commission in July 2011 by Governor Scott Walker. She was reconfirmed for a new, six-year term beginning on March 1, 2013. Commissioner Nowak was named Chairperson of the Public Service Commission of Wisconsin in March of 2015. She serves on the Executive Committee and the Board of Directors for the National Association of Regulatory Utility Commissioners (NARUC). Her duties at NARUC also include serving on the Committee on Energy Resources and the Environment and the Task Force on Environmental Regulation and Generation. Commissioner Nowak also serves on the Advisory Council to the Board of Directors for the Electric Power Research Institute. Prior to her appointment, she served as the chief of staff to Waukesha County Executive, Dan Vrakas. From 2002-2006, she served as legal counsel and subsequent chief of staff to the Speaker of the Wisconsin Assembly. She also later worked as the deputy director of School Choice Wisconsin. From 1998-2002, Ellen practiced business litigation at Mallery & Zimmerman, SC in Milwaukee. Ellen has a law degree from Marquette University and a Bachelor of Science from the University of Wisconsin – Milwaukee Distribution Planning: A View from Abroad EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Utilities in the United States and around the world are increasingly focused on managing the growing penetration of distributed energy resources (DERs) into their grids. A key element of this process is ensuring that distribution system planning be transparent and collaborative involving all stakeholders. The strategic landscape is evolving rapidly, presenting both challenges and opportunities—and the case is being made that the incumbent provider should be the distribution service operator, providing the central platform for customers across the value chain. In this Board segment, we will get a preview of how this process is unfolding in two other hemispheres in a discussion with Nigel Barbour, CEO of PowerCo in New Zealand, and Suleman Alli, Chief Strategy Officer of UK Power Networks. CEO Panel on Grid Modernization EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 The U.S. is undergoing a profound transformation in the way electricity is used and produced. This transformation is in large part driven by new digital control and communications systems, along with distributed energy resources (DER) such as customer-owned solar and wind generation, combined heat and power, electric vehicles and charging stations, and electricity storage. The smart energy grid is and will be the enabling platform for these technologies. As the deployment of DER increases, so too does the value and importance of the smart energy grid—which provides the services to deliver power, maintain reliability and assure low-cost and efficient operations. This CEO panel will examine new approaches to achieve the most cost effective, efficient, and reliable electric system, one that provides all technologies a level playing field in which to best serve the grid and customer needs. It will address:         Coordinated Planning Pricing Reliable, Safe and Expert Operations Increased System Visibility Interoperability Secure Data Grid Investments Customer Solutions EEI Board Leads: Theodore F. Craver, Jr., Chairman & CEO, Edison International, Moderator Constance H. Lau, President & CEO, Hawaiian Electric Industries Michael L. Mosher, President & CEO, Central Hudson Gas and Electric Corp. Grid Modernization: Building Smarter Electricity Infrastructure to Deliver Superior Customer Solutions Value of the Grid: Our country is undergoing a profound transformation in the way that electricity is used and produced. This transformation is in large part driven by the availability of new digital control and communications systems, and distributed energy resources (DER) such as customer-owned solar and wind generation, combined heat and power, electric vehicles and charging stations, and electricity storage. The smart energy grid is and will be the enabling platform for these technologies. As the deployment of DER increases, so too does the value and importance of the smart energy grid which provides the services to deliver power, maintain reliability, and assure low-cost and efficient operations. These changes require new approaches to distribution system planning, operation and pricing to achieve the most cost effective, efficient, and reliable electric system, one that provides all technologies a level playing field in which to best serve the grid and customer needs. Coordinated Planning. Planning must become more collaborative for better visibility and control of DER to navigate increasing grid complexities, and maximize the benefits that customer provided facilities and options can provide to the electric system. Because electric companies ultimately are responsible for -- and have a proven track record in -- reliability, system performance, and security, they should continue to have a major role in the planning, building, and operation of the smart energy grid. Working with customers and third parties under the supervision of state utility regulators, electric companies can provide better information about grid operations and help ensure that DERs are located in places where they provide the most value to all customers. They can incorporate necessary system flexibilities, coordinate reliability and security, and optimize overall smart energy grid solutions to deliver the most economic solutions to all customers -- optimizing overall societal benefits. Pricing. Regulatory rules for allocating grid costs among customers and competing uses of the grid must evolve to create better price signals to achieve efficient operations and fair solutions for all grid users. New grid pricing rules are likely to require greater differentiation among different types of grid uses, greater attention to technologies for automated control and monitoring of both generation and demand response, and greater recognition of the values of ancillary services. New grid pricing rules will recognize the new costs of providing new grid services, and the importance of increased use of time-based pricing approaches for both demand and energy. Reliable, Safe and Expert Operations. As the grid becomes more complex, centralized operation and control becomes even more important to assuring efficient, reliable, and safe operations at the lowest cost. Electric companies as the Distribution System Operators know how to manage a dynamic, evolving network that is reconfigured daily; address real-time physical operational needs; and closely coordinate with field crews to ensure worker safety and overall system reliability. A smart energy grid is the platform for safe, reliable service that enables a range of customer solutions, including DERs. 1 Increased System Visibility. Grid operators increasingly require greater visibility into operations affecting their distribution systems, including distributed resources and microgrids, to maximize the efficiency, safety, and reliability of the overall electric system. This may include advanced information and communications systems, more automated controls, monitoring, sensing, and operational equipment, ultimately leading to the development of a more advanced and integrated platform. Interoperability. Grid interoperability standards that allow technologies to interface effectively and meet reliability, security (physical and cyber), and safety considerations, are fundamental to an integrated smart energy grid. The electric power industry is working with federal and state agencies, and technology providers to continuously incorporate advanced technologies, to help standardize interconnection and usability, and to foster reliability and cybersecurity. Interface, reliability, security, and safety considerations must be incorporated into new technologies before they are integrated into the grid. Secure Data. New technologies are producing more data than ever before. While this data presents tremendous opportunities, it also brings new challenges. Standards to protect the privacy and security of both customers and grid systems are essential. In addition, the broad exchange of information among multiple stakeholders, using interconnected information and integrated information, and communication platforms, increases the need for cybersecurity protections. Grid Investments. Electric companies are already investing in smarter energy infrastructure, and will continue to do so. Public policies should continue to promote investments in upgrading the grid, while appropriately allowing electric companies the opportunity to recover the costs of these investments from all who benefit from the energy grid. At the same time, such policies must enable electric companies to continue offering sustainable grid services. Given the new uses of the smart energy grid, this will require reconsideration of traditional policies to allocate grid costs. Payment for services provided by the smart energy grid should be based on sound rate-making principles centered in around economic efficiency, and equity, and transparency, among others. Customer Solutions. Investments in a smarter energy grid provide the foundation for better customer solutions. For example, cities and towns are requesting smart city services, microgrids, and renewable energy. Some residential customers want their homes to be powered exclusively by renewable power from the grid, while others want to generate their own energy (e.g., private solar). Some large commercial customers are increasingly requesting specialized clean-energy services to meet their corporate sustainability goals while others, such as data centers, want premium reliability services to maintain the viability of their businesses. Electric companies should be able to compete to provide these customer solutions, with appropriate protections against preferential access to customer or system information. 2 Industry Vision for 2030 & Policy Goals Grid Modernization • Promote the value of the grid and advocate for appropriate rate reform. • Advocate for policies in which utilities have primacy in planning, building and operating the grid as a platform to integrate a diverse set of emerging technologies. • Support public policies that promote investment in new grid technologies, along with customer support for continued cost recovery. • Encourage expanded utility partnerships with leading technology companies to accelerate the adoption of a 21st-century grid. • Continue to reinforce industry efforts to strengthen cybersecurity defenses by establishing an industry-wide cyber mutual assistance program in coordination with federal agency partners. Industry Vision for 2030 & Policy Goals Customer Solutions • Reform rates to better reflect the cost structure for providing electric service, for maintaining grid reliability and resiliency, and for meeting customers’ changing needs and expectations. • Ensure that utilities are able to offer products and services on both sides of the meter, including energy efficiency, demand response, etc. • Promote broader end-use utilization of electricity, including electrification in various sectors to enhance customer options. • Convene forums for collaboration and partnerships with policymakers, stakeholders and customers to achieve enhanced support for utility programs, products and services. Industry Vision for 2030 & Policy Goals Clean Energy • Expedite reforms governing wholesale electricity markets in ways that will enhance fuel diversity and reliability. • Achieve policies leading to full cost-recovery for prematurely retiring coal-based generation. • Develop streamlined interconnection policies that will accelerate adoption of renewables and distributed generation resources. • Create policies that will continue to enable full participation by utilities in all aspects of renewables and energy storage. • Continue support for policies that eliminate cost-shifting with regard to distributed generation. ESG/Sustainability Reporting Initiative 2016 Board and Chief Executives Meeting – September 2016 Background As discussed at the June Board meeting, there have been a variety of disclosure and divestment initiatives tied to the climate issue that potentially impact the cost of capital and access to capital markets for utilities. EEI has been actively engaged with investors and policy makers to ensure that these don't have negative impacts on the industry and that they take into account the significant activities and voluntary disclosures on sustainability that utilities already make. Report to EEI Board by Members of the Financial Community As a recap, the financial community provided the following views at the June Board meeting: • The industry needs to evolve its stance of “We are already reporting more information than most, and any material information is already by definition included in the 10-K or 10-Q”. • Changes in S-K reporting are not needed. Industry-specific or issue-specific approaches are not desirable and will stifle innovation in reporting and deny the forward story (as happened with Conflict Minerals). Additionally, it will drive up reporting costs. Action Items EEI has begun work on several ESG/sustainability disclosure initiatives since the June meeting, with an overall goal of establishing industry guidelines that will better inform investors and benefit utilities. EEI’s Wall Street Advisory Group has stressed the importance for the industry to step up its efforts in ESG/sustainability reporting, and we’ve created an EEI ESG Investor Team to gain feedback from major investors and institutions regarding the ESG/sustainability information they need to see. EEI filed comments in response to the following: • SEC Concept Release on Business and Financial Disclosure Required by Regulation S-K o EEI filed comments jointly with AGA in July, urging the SEC to not depart from the disclosure principles in Regulation S-K by including topic-specific sustainability, corporate governance, or similar categories for specific disclosure. • SASB Industry Classifications, Rules of Procedure, and Conceptual Framework o EEI submitted comments during July on these procedural and process documents, reiterating our earlier concerns about lack of industry engagement, lack of diversity in constituencies developing their standards, absence of an appeals process, and general lack of transparency including as to how stakeholder comments will be addressed. We also continued to disagree with their proposals for mandatory, quantitative, duplicative disclosures that would be presented without proper context. EEI will continue to positively address the politically-motivated groups and initiatives that are focused on negative disclosures and choking off capital to the industry. Part of this will be effectively differentiating our industry from other fossil and extractive industries. Sustainability Reporting 2016 Board and Chief Executives Meeting – September 2016 EEI Assessment of Current ESG/Sustainability Reporting • Almost all members are reporting on ESG/sustainability • There are central themes, but much variability of this information • Information needs to be more accessible and focused on meeting investor needs • The “forward looking” story needs to be told, which is almost uniformly positive for utilities o Major capex plans focused on cleaner energy o Recovery is provided for most fossil assets o Strong regulatory compact o Steady growth, based largely on capital stock turnover Next Steps: Work Towards Industry Guidelines Work with investors and member companies to establish guidelines for improved ESG/sustainability reporting • Identify key data sets • Identify the most useful approaches • Promote these guidelines throughout the industry • Achieve a positive response from investors and financial institutions as a good approach when comparing among various industry groups EEI Board Leads: James L. Robo, Chairman & CEO, NextEra Energy Leo P. Denault, Chairman & CEO, Entergy Corporation Constance H. Lau, CEO & President, Hawaiian Electric Industries 2 July 20, 2016 Investors and environmentalists for sustainable prosperity The Honorable Mary Jo White Chair Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Re: File Number S7-06-16: Business and Financial Disclosure Required by Regulation S-K Dear Chair White: We are a group of asset owners and asset managers, representing $1.15 trillion in assets under management. We use a variety of strategies to reduce sustainability risks in our portfolios, such as reviewing companies’ SEC filings, advocating for improved sustainability disclosure, engaging with companies on their sustainability practices, asking companies to provide voluntary reporting on environmental, social and governance (ESG) issues affecting their businesses, filing shareholder proposals, proxy voting, and assessing and managing such risks in our portfolios. Based on our experience with these issues, we believe it is critical for the SEC to improve reporting of material sustainability risks in issuers’ SEC filings, both because such disclosure is mandated by current law and because we need it to make informed investment and proxy voting decisions. We urge that the Commission not wait for the ultimate outcomes of current sustainability reporting initiatives, but instead immediately step up efforts to improve disclosure of material sustainability risks by US listed companies in their mandatory securities filings. We recommend that the SEC approach sustainability disclosure as it would any other disclosure issue. Several elements need to be in place to ensure robust reporting that at the same time remains flexible as risks evolve due to regulatory changes, scientific findings, technology advancements, changing weather patterns and other developments. Meaningful disclosure can be elicited with appropriate disclosure rules or guidance in place, staff who are trained to understand sustainability risks and ! directed to focus on them, comment letters to issuers with deficient or questionable disclosures, other enforcement mechanisms, and regular dialogues with investors and issuers about their relevant needs and concerns. Each of the leading voluntary sustainability disclosure frameworks includes useful elements that SEC staff should consider when enforcing existing rules and guidance, issuing interpretive guidance or proposing new line-item disclosure requirements. We recommend that SEC staff review the sustainability and climate-related reporting frameworks developed by the Global Reporting Initiative and CDP, and the sector-specific climate risk management and disclosure guides developed by members of the Global Investor Coalition on Climate Change (Ceres/INCR, IIGCC and IGCC). We also recommend you review frameworks focused onFAXfinancial reporting developed by the Climate 99 Chauncy Street Boston the MA, 02111-1703 TEL 617-247-0700 617-267-5400 www.ceres.org Disclosure Standards Board, the Sustainability Accounting Standards Board, and the International Integrated Reporting Coalition. Regarding climate change, we believe that existing SEC rules have not, as applied by the Commission to date, produced sufficient information for investors to evaluate material risks, which we believe are becoming increasingly significant to companies in multiple sectors. While we appreciate the Commission’s 2010 interpretive guidance on climate change-related disclosure, its potential has been left largely untapped. Staff has issued very few comment letters regarding the inadequacy of current disclosures and has not pursued enforcement actions for failure to meet disclosure requirements, despite a very active financial risk and disclosure enforcement agenda in other areas. Such actions would go a long way towards ensuring that companies were updating their disclosures to reflect the evolving material risks associated with climate change. In the last six years, although voluntary sustainability disclosure frameworks have become increasingly sophisticated, the disclosures provided by companies in SEC filings regarding material effects that sustainability issues may have “upon the capital expenditures, earnings and competitive positions” of registrants are still confined largely to large cap companies—and not even all of those—and many of the disclosures that are there have remained vague. In particular, it appears that companies have not provided MD&A disclosures that provide investors with sufficient detail regarding companies’ internal analyses of the financial risks associated with “known trends, demands, commitments, events, and uncertainties that are reasonably likely to have a material effect on financial condition or operating performance.” Climate change and governmental responses thereto, changing weather patterns, water scarcity and human rights issues in corporate supply chains all fall into these categories and need better company-specific disclosure to meet investors’ needs. In a number of cases, additional guidance or line-item disclosure requirements are needed to elicit consistent, comparable, decision-useful narrative and metrics-based sustainability information that is useful to investors. For example, the business plans of many oil and gas, electric power, and coal companies appear to pose material financial risks to investors, because they are based on forecasts for increasing demand that fail to take into account the accelerating transition to a low carbon global economy. Even as enforcement actions may be warranted to address materially inadequate disclosures by these companies under the existing rules, new disclosure rules regarding the alignment of business plans with the greenhouse gas reduction targets of the Paris agreement may be necessary. Similarly, water risks are one of the most significant and immediately felt physical and financial impacts of climate change on many companies in water-dependent sectors, and rules may be needed for investors to obtain decision-useful water risk and mitigation management information. While many investors have engaged with or urged companies to provide better ESG disclosure and risk management, as long as this disclosure is perceived as voluntary, there will be many companies—including the majority of small and mid-cap companies—who continue to see it as immaterial. Moreover, this imposes a significant burden on investors who conduct engagements to persuade companies to disclose material ESG issues. With the increasing pressure to control fees and expenses, corporate ESG engagement is growing more expensive and difficult for some individual investors. SEC action is needed to provide a level playing field and give all investors comparable and useful material ESG information. Thank you for your consideration of these comments. As the Commission works to improve the disclosure of material sustainability risks, we would welcome the opportunity to provide further input about the type of reporting we require. We would be pleased to meet with the Commission and its 2 staff to discuss these issues further. Sincerely, Adam Kanzer Managing Director Domini Social Investments LLC Kevin C. Weinman Chief Financial and Administrative Officer Amherst College Vincent Kaufmann CEO Ethos Foundation, Switzerland Natasha Lamb Managing Partner Arjuna Capital Clara Miller President F.B. Heron Foundation Dylan Sage Executive Vice President Baldwin Brothers Inc. Steven J. Schueth President First Affirmative Financial Network Anne Simpson Investment Director, Global Governance California Public Employees’ Retirement System Jeffery W. Perkins Executive Director Friends Fiduciary Corporation Betty T. Yee California State Controller Leslie Samuelrich President Green Century Capital Management Stu Dalheim Vice President, Governance and Advocacy Calvert Investments Ian Simm Chief Executive Impax Asset Management Ion Yadigaroglu Managing Principal Capricorn Investment Group Dr. Matthew Kiernan Chief Executive Inflection Point Capital Management Shelley Alpern Director of Social Research & Shareholder Advocacy Clean Yield Asset Management Cllr Kieran Quinn Chair Local Authority Pension Fund Forum Denise L. Nappier State Treasurer Connecticut Retirement Plans and Trust Funds Katie Briggs Managing Director Laird Norton Family Foundation 3 Rev. Michael H. Crosby Executive Director Seventh Generation Interfaith Coalition for Responsible Investment Mark Kriss Managing Partner Macroclimate Jenny Russell Executive Director Merck Family Fund Sister Patricia Daly, OP Corporate Responsibility Representative Sisters of St. Dominic of Caldwell, NJ Luan Jenifer Executive Vice President Miller/Howard Investments, Inc. Sally Osberg President and CEO Skoll Foundation Hervé Guez Director, Responsible Investment Research Mirova Danielle Ginach Associate Director, Impact Manager Sonen Capital Nancy K. Kopp Treasurer State of Maryland Scott M. Stringer New York City Comptroller Thomas P. DiNapoli New York State Comptroller New York State Common Retirement Fund Melissa Beck Executive Director The Educational Foundation of America David T. Abbott Executive Director The George Gund Foundation Julie Fox Gorte, Ph.D. Senior Vice President for Sustainable Investing Pax World Funds Elizabeth McGeveran Impact Investing Program Director The McKnight Foundation Carrie A. Endries, Ph.D. Director of Impact Investments Reynders, McVeigh Capital Management Laura Campos Director of Shareholder Activities The Nathan Cummings Foundation Jay Huish Executive Director San Francisco Employees’ Retirement System Stephen B. Heintz President The Rockefeller Brothers Fund Kenneth J. Nakatsu Executive Director Seattle City Employees’ Retirement System Andy Mims Partner and Trustee The Sustainability Group of Loring, Wolcott & Coolidge 4 Brianna Murphy Vice President, Shareholder Advocacy Trillium Asset Management Timothy Brennan Treasurer & CFO Unitarian Universalist Association Patricia Farrar-Rivas Partner and CEO Veris Wealth Partners Aaron Ziulkowski Senior ESG Analyst Walden Asset Management Theresa Whitmarsh Executive Director Washington State Investment Board 5 July 21, 2016 Mr. Brent J. Fields Secretary Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090 File Number S7-06-16 Request for Comment on Business and Financial Disclosure Requirements in Regulation S-K Dear Mr. Fields: The Edison Electric Institute (EEI) and the American Gas Association (AGA) appreciate the opportunity to respond to the Securities and Exchange Commission’s (SEC or Commission) request for comment on Business and Financial Disclosure Requirements in Regulation S-K (hereafter the “Request for Comment”). EEI is the association that represents all U.S. investor-owned electric companies. EEI members provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly and indirectly create jobs for more than one million Americans. With more than $100 billion in annual capital expenditures, the electric power industry is responsible for millions of additional jobs. EEI has 70 international electric companies as Affiliate Members and 270 industry suppliers and related organizations as Associate Members. Organized in 1933, EEI provides public policy leadership, strategic business intelligence, and essential conferences and forums. AGA, founded in 1918, represents 202 local energy companies that deliver clean natural gas throughout the U.S. There are more than 70 million residential, commercial and industrial natural gas customers in the U.S., of which almost 93 percent – more than 65 million customers – receive their gas from AGA members. AGA is an advocate for natural gas utility companies and their customers and provides a broad range of programs and services for member natural gas pipelines, marketers, gatherers, international gas companies and industry associates. Today, natural gas meets almost one-fourth of the energy needs in the U.S. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 2 EEI and AGA regularly work together on projects of mutual interest and impact to the energy utility sector broadly. The comments expressed herein respond only to certain questions that are most relevant to our members. We provide our comments on certain specific questions as they relate to Regulation S-K in the Request for Comment below. Nature of our Disclosure Requirements Principles-Based and Prescriptive Disclosure Requirements We believe maintaining a principles-based disclosure framework allows a registrant to more effectively tailor its disclosures to provide the information it believes is relevant for investors to understand its business and financial condition. Essential to the effectiveness of such a framework is the application of an appropriate threshold, which we believe should be rooted in the concept of materiality, in determining when and what information should be disclosed. With respect to the definition of materiality, the U.S. Supreme Court has held that information is material if there is a substantial likelihood that a reasonable investor would consider the information important in deciding how to vote or make an investment decision. We believe this current definition should be retained, as it allows for sufficient consideration of both qualitative and quantitative factors in the context of a registrant’s specific facts and circumstances and also reflects current practice. In addition, after public due-process involving the same stakeholder groups likely to respond to the Request for Comment, the Financial Accounting Standards Board (FASB) recently made changes to its conceptual framework to clarify that the concept of materiality is a legal concept and aligned the generally accepted accounting principles (GAAP) definition with the concept as defined by the U.S. Supreme Court. Changing the definition of materiality would result in diversity between GAAP and SEC rules and require registrants to apply different definitions of materiality in complying with disclosure requirements of GAAP versus Regulation S-K. We encourage the Commission to consider revising the disclosure requirements as further discussed below to remove prescriptive thresholds where such thresholds may result in the disclosure of information that is immaterial in the context of a registrant’s business. As acknowledged in the Concept Release…“Limiting prescriptive disclosure requirements and emphasizing principles-based disclosure could improve disclosure (effectiveness) by reducing the amount of information that may be irrelevant, outdated or immaterial.” To the extent that prescriptive thresholds are retained, we believe they should be based on a relationship to a registrant’s financial metrics (e.g., as a percentage of revenues or assets) rather than a specific dollar amount. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 3 More specifically, we recommend removing the disclosure threshold of $100,000 required by Instruction 5.C of Regulation S-K Item 103 for those matters related to government penalties/fines and instead require disclosure of those matters only that are material. Using prescriptive quantitative thresholds for disclosure requirements can result in irrelevant or immaterial disclosures that may not provide meaningful information to investors and may distract from those matters that are material. In addition, material contingencies are already required to be disclosed in the notes to the financial statements and discussed in Management’s Discussion and Analysis (MD&A); therefore removal of this prescriptive requirement would reduce redundancy and eliminate disclosure of non-material information. Audience for Disclosure Requirements We believe it is appropriate and necessary for registrants to assume some level of investor sophistication in preparing their disclosures. As noted in the Concept Release, the most frequent users of Form 10-K disclosure are institutional investors, professional security analysts and sophisticated individual investors. Assuming a novice level of investor sophistication would unduly burden registrants and could result in a substantially greater volume of disclosure, but without increasing the overall usefulness of the information disclosed for the broader investor population. Accounting and finance topics can be complex. Providing clear, concise, and understandable disclosures for reasonably sophisticated investors should be the goal of every registrant. To this end, the Commission should consider expanding the “Plain English Rules” to Regulation S-K. Applying these rules to Regulation S-K would encourage registrants to explain complex issues in a language investors can understand. Core Company Business Information We believe there is significant opportunity to increase the effectiveness of disclosures by eliminating or reducing certain disclosures required by these topics. The five-year history and general business information about a registrant’s formation, organizational structure, general operations (e.g. products and services, sources of materials, seasonality, number of employees, etc.) and material properties required under Items 101 and 102 of Regulation S-K generally does not change significantly from year-toyear. Repeating these disclosures each year, especially for well-established companies, provides limited value to investors and may potentially obscure/distract from more important information included in the document. While such information may be more meaningful in certain situations (e.g., an emerging growth company), we believe well-established companies should be allowed to provide 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 4 the information through other means (e.g., filer information page on the company or SEC website, or through a separate filing with the SEC) with updates only required every three years or more frequently if there has been a substantial change. If there were significant changes to this information in the interim periods or other important changes to the registrant’s industry, business environment, or other factors impacting its operations or financial position that would be meaningful to an investor, those changes would typically be disclosed elsewhere in the registrant’s Form 10-K or Form 10-Q (e.g., MD&A or notes to the financial statements). Company Performance, Financial Information and Future Prospects Selected Financial Data We recommend removing the disclosure requirements in Item 301 and 302(a) to present selected financial data. While the disclosure requirements are intended to provide financial statement users with access to key summary data and highlight significant financial trends for the registrant, the information is contained elsewhere in the document on a three and two-year comparative basis for the income statement and balance sheet, respectively. Additional periods are now available online, either on the company or SEC websites, which allows financial statement users to access prior information if needed. The prior period financial information was not readily available when this requirement was enacted. In addition, use of XBRL allows financial statement users to extract specific financial data in addition to the information provided in the current disclosure. There is additional complexity under current disclosure requirements when evaluating whether a registrant is required to recast prior period financial statements as a result of adopting new accounting standards or a change in the business, such as a discontinued operation. In cases where a registrant is required to recast prior periods, the financial statements are already being recast for all periods presented (three years income statement and two years balance sheet). Recasting the fourth and fifth years required by this disclosure adds incremental cost with limited benefit. The recast financial statements should be sufficient for financial statement users to evaluate the impact of the accounting change on results of operations and financial condition. MD&A requires disclosure of a registrant’s financial performance which generally includes a discussion of any significant financial trends. We do not believe the selected financial data required to be disclosed adds significant incremental value beyond that already typically included in MD&A. Management’s Discussion and Analysis MD&A requires management to disclose the activity of the business, significant trends and assumptions, and an analysis of the quality of the company’s earnings and cash 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 5 flow to allow the financial statement user to evaluate the business from management’s perspective. While we acknowledge that using tabular formats can help make disclosures more understandable in some cases, we believe the format of the information disclosed in results of operations should be left to the discretion of each registrant to determine the best means of presenting information, rather than prescribing specific tabular disclosure requirements. A combination of narrative discussion, tables and charts would afford the registrant the flexibility needed to provide the financial statement user with a complete picture in the most understandable format. The disclosure requirements in Item 303(a)(5) for contractual obligations need to be more clearly defined, specifically related to purchase obligations and construction contracts. There appear to be differences in interpretation regarding the application of the contractual obligation requirements and the information to be included in this disclosure. In addition, registrants evaluate the same pool of contracts for the Commitments footnote disclosure required by GAAP. One notable difference between these disclosures is the MD&A disclosure represents cash commitments of the registrants while the footnote disclosure represents commitments for which registrants are legally obligated. Thus, SEC filings presently include disclosures that may appear identical but in fact differ, causing confusion for both registrants and users. We recommend the Commission eliminate this duplicative disclosure by adopting a presentation consistent with GAAP. If necessary, a cross reference can be made to eliminate duplicative disclosure. The current Regulation S-K guidance related to critical accounting estimates generally results in duplicative disclosure with the information contained in the summary of significant accounting policies disclosed in the footnotes. We recommend the Commission work with the FASB to find ways to reduce redundancy in this area between Regulation S-K and GAAP requirements while maintaining the objective of providing an analysis of the uncertainties of applying the specific principles in the registrant’s MD&A. We also recommend removing the requirement to disclose in MD&A new accounting pronouncements and accounting pronouncements effective in the future. This disclosure duplicates information contained in the footnotes. Risk and Risk Management Risk Factors (Item 503(c)) We believe the risk factor disclosure requirements in Item 503(c) provide important information to investors, but improvements can be made to the standard to realign and emphasize the expected nature and scope of the required disclosures. The original guidance intended the risk factor disclosures to be organized and concise and to focus 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 6 on the most significant and principal factors that make a registrant’s securities speculative or risky. However, over the course of time we believe registrants have expanded upon these disclosures, and as such, may unintentionally disclose factors beyond the scope and intent of the requirements in Item 503(c). We believe some of the contributing causes of this are:     A response to increased regulation over the course of time; The financial crisis and recession of 2007-2010; Registrants erring on the side of over-disclosure due to liability concerns; and Changes in risk profiles and mega trends such as: cybersecurity, climate change, aging workforce, etc. Many of these additional risk factors are boiler-plate in nature and represent normal risks across many industries that are not specific to the individual registrant. These generic risk factors lack relevance to our primary investors. As a result, we believe clarifications and improvements could be made to Item 503(c) to make these risk factor disclosures more effective. The disclosure requirements pursuant to Item 503(c) should be principles-based in nature which would allow registrants greater flexibility and judgment in determining which risk factors to disclose. We believe this would allow registrants to focus more clearly on risks specific to their company and help to avoid and eliminate boiler-plate disclosures. While the current disclosure requirements state that risk factors should be limited to those that are “most significant”, we recommend clarifying this term for purposes of the risk assessment process. For instance, the requirements should explicitly state that the process for assessing which risk factors to disclose should encompass multiple considerations such as probability, materiality, and an assumed level of sophistication of the registrant’s investor base. Registrants should be allowed to apply probability based principles in the assessment process. Similarly, registrants should be allowed to apply judgment in assessing materiality of risk factors and omit those that are deemed to be immaterial. Also, within our industry a majority of the investors and users of the financial statements are institutional investors with a reasonable level of sophistication and understanding of the industry and its risks as a whole. We believe registrants should be able to take these matters into consideration as they decide which risk factors are most significant, which would help reduce disclosures that are common among the industry and not specific to the company. We also recommend amending Item 503(c) to include specific examples to clarify which type of disclosures are deemed too “generic” and need not be included as risk factors. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 7 We believe this would aid registrants in focusing more on company-specific risk factors that are more meaningful to our investors. Disclosure of Information Relating to Public Policy and Sustainability Matters Background We note that the filings governed by Regulation S-K are focused on information designed to help investors assess the amount, timing, and risks associated with a registrant’s future cash flows. That is, they are focused on financial information. As such, Regulation S-K articulates principles designed to identify when any topic could have a material impact on investors’ assessments of the registrant’s financial information. Thus, the overall context of SEC filings, and the purpose for which they exist, is to provide materially correct financial information, material disclosures necessary to understand that information, explanations of the reasons for material changes from period to period, and explanations of material known trends or uncertainties that would cause the historical information not to be representative of the future. A transaction, event, contingency, or policy required to be reported is only relevant within this context: to support and explain the historical financial results and to indicate to what extent, if any, they would need to be adjusted by investors for known trends and uncertainties in order for investors to project future results. Given this context, the content of such reports includes only those matters that are financially material. The definition of materiality does not focus on the nature or category of an issue, but rather on whether it could affect an investor’s assessment of the reported financial information, leading to an impact on the investor’s decisions. The requirements of the existing SEC financial reporting disclosure regime, therefore, necessitate company-specific judgment about individual circumstances, events, and transactions that consider the context of the entity’s operations. Sustainability Disclosures Would Reduce Effectiveness of SEC Filings Given this background, we do not support the proposed addition of sustainability or public policy issues or similar matters as a distinct category for disclosure. We believe that the existing framework for identifying disclosures based upon whether they are material to the registrant’s financial information is sufficiently robust and well-focused to encompass any disclosures related to these topics that investors may need for evaluating financial information. We also believe that the inclusion of such disclosures in SEC filings, either on an ad hoc basis or through frameworks proposed by outside stakeholders, would not be helpful for the intended audience of these filings. In fact, their inclusion could potentially obscure 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 8 relevant disclosures. Management appropriately uses its judgment to report on matters that it determines are material to investors and other users of its financial statements. As a result, and to the extent necessary, sustainability matters are discussed in SEC filings in a focused manner that considers whether each specific issue is material to that registrant’s financial information. By contrast, we note that some proposed sustainability reporting frameworks include voluminous, prescriptive disclosures for these topics. We disagree with the assertions of proponents of those frameworks that a topic can be material based upon its nature alone (e.g., sustainability). Rather, it is the intersection of the topic with a registrant’s operations and finances that could lead to a determination that certain information may be material. Simply including disclosures for a topic without regard to its materiality would reduce, rather than increase, the effectiveness of these reports, which is inconsistent with the over-arching objective of improving disclosure effectiveness. By making disclosures less effective, such actions would obscure, not clarify, relevant matters. This is particularly true with respect to proposals to include quantitative non-financial information such as environmental and social statistics. Such information is distinct from economic information contained in audited financial documents. Further, adding such topics to disclosure requirements would be inconsistent with the focus and direction of current disclosure effectiveness initiatives by the Financial Accounting Standards Board (FASB) and even under this Request for Comment. As part of these efforts, we understand stakeholders have indicated that voluminous disclosure is often unintelligible and obscures the reader’s ability to focus on specific matters that are material. Given this shortcoming, these initiatives have been designed to improve the effectiveness of financial disclosures and to minimize duplication with other existing disclosure requirements. The FASB’s and SEC’s efforts target improving the effectiveness of disclosure reporting by focusing on the information most meaningful and material for investors to make informed decisions, and avoiding information overload. FASB in particular has proposed to eliminate from its standards all minimum disclosure requirements (phrases such as “provide, at a minimum, the following information”1). By contrast, adding a new set of sustainability disclosures could have the opposite effect by requiring broad-based, voluminous disclosures regardless of whether some or all of the recommended content is material, important, or relevant to understanding the financial results of an individual company’s business. 1 FASB Exposure Draft “Notes to Financial Statements (Topic 235) Assessing Whether Disclosures Are Material” 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 9 Separate Reporting for Sustainability and Public Policy Disclosures Our member companies voluntarily disclose sustainability metrics in separate reports (other than SEC filings) specifically designed to discuss these matters for stakeholders who find them relevant. We believe that this separate reporting vehicle is the most effective and appropriate means for communicating such information. The existence and development of such reports absent any specific regulatory requirement illustrates that this type of information is best communicated outside SEC filings in reporting formats that best suit the needs of preparers and users. The audience for sustainability and public policy information is much broader than that for the users of registrants’ SEC filings. Government agencies, environmental organizations, regulators, and local civic and advocacy organizations and other groups may find sustainability and public policy information relevant. However, many of these groups are not investors and they should not be required to look to a financial report designed primarily for investors in order to obtain this information. Further, these readers’ interests often encompass topics that differ substantially from financial reporting, such as a company’s policies, its practices and how they have changed over time, detailed information relevant to development or modification of public policy initiatives, and how an entity’s activities impact a local community. Additionally, the information these users seek often is immaterial from a financial reporting perspective. Finally, we note that adding a sustainability reporting framework to financial reporting requirements would not likely replace the many current sustainability reporting frameworks that exist at present, but simply would add an additional framework. For companies already responding to a significant number of reporting frameworks – GRI, CDP, DJSI etc. – incorporating such disclosures in financial reporting requirements would layer an additional cost in an already resource-constrained area. We believe that there would be significant additional costs to providing new line item disclosures in order to gather, track, verify, review, and report on additional issues and metrics. We believe that the substantive differences between the purpose, content and objectives of SEC filings compared to sustainability and public policy matters demonstrate that users of each type of data would be best served through reports targeted to their specific needs. Therefore, we believe that the principles of Regulation S-K applicable to registrants’ financial reports should not be revised to add disclosures based upon topics such as sustainability or corporate governance. Those topics would be best addressed in separate reports focused on those matters with a context, scope, and format that is not restricted by, or commingled with, specific rules related to financial disclosures. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 10 Conclusion For the reasons stated above, we urge the Commission not to depart from the disclosure principles in Regulation S-K by including topic-specific sustainability, corporate governance, or similar categories for specific disclosure. Doing so would reduce the effectiveness of the existing reporting regime and would be sub-optimal for those seeking broad-based reporting on matters outside the scope of SEC filings. Instead, we support the existing, time-tested approach in Regulation S-K that focuses on the needs of users of financial information and is based on principles designed to elicit disclosure of all material items, regardless of topic. Cross-Referencing We recommend modifying the rules to clarify that registrants may cross-reference within the Form 10-K, including within the MD&A. While rules do not prohibit the use of crossreferences, the Commission has indicated there may be instances where crossreferences would not satisfy the requirements or would detract from the readability or completeness of the disclosure. For example, the Commission has stated that its MD&A rules are intended to provide, in one section of a filing, a discussion of all the material impacts on the registrant’s financial condition or results of operations, including those arising from circumstances discussed elsewhere in the filing. This does not further the Commission’s objectives of improving disclosure effectiveness by reducing redundancy and improving the readability and usefulness of disclosures. We believe that all sections of Regulation S-K under Items 303(a) and (b) could benefit from cross-referencing and recommend that applicable items should be amended to specifically encourage, but not require, the use of cross-references similar to those notations in Items 101(b) and (d)(2), 202(a)(5), and Instruction 5 to Item 303(a)(4) of Regulation S-K. Additionally, MD&A, certain investment company disclosures, and SEC Release No. 33-6835 dated May 18, 1989 should be amended to specifically encourage the use of cross-references. The addition of cross-referencing is not intended to change the original disclosure objectives but rather to reduce redundancy and improve the readability and usefulness of disclosures. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 11 Incorporation by Reference We recommend allowing a voluntary filer to incorporate its Form 10-K or Form 10-Q by reference in other filings with the SEC. This would eliminate the need to repeat all of the same information in the voluntary filer’s registration statements (e.g., S-4). Including financial statements in filings such as an S-4 also requires that information to be tagged with XBRL, which increases the administrative burden of preparers without providing additional benefit to investors or other financial statements users. Structured Disclosure (XBRL) We propose eliminating the requirement to provide detail tagging for certain financial statement footnote disclosures. While use of XBRL can enhance data comparability, it has practical limitations that current SEC requirements do not fully consider. Users of financial statements can readily compare large amounts of data across companies and industries, particularly when the sources of that data are financial statements tagged with XBRL. The use of block tagging can also make the search for accounting policies and certain topical disclosures more efficient. Even certain footnote details, those that lend themselves to a tabular format, can be depicted in XBRL with serious but reasonable effort (e.g., tabular disclosures related to segments, pensions, financial instruments, fair value, future debt maturities and future minimum lease payments). However, by their very nature, some footnotes disclose details in a narrative format with contextual nuances that cannot be depicted easily in a single XBRL tag, and oftentimes an extra standard axis is not enough to adequately convey the meaning. As examples, in the electric and gas industry, footnotes describing rate proceedings before state and federal regulatory bodies, as well as numerous commitments and contingencies, are common. Differing amounts of rates requested, settlements reached and orders issued, sometimes from multiple state and federal jurisdictions, each with their specific and significant details, must be described. Further, we disclose the effects of numerous commitments and contingencies, especially related to the environment, each with a different impact on operations and liquidity due to complex and sometimes overlapping requirements and compliance deadlines. We believe other industries could offer examples with similar challenges. We believe all stakeholders are better served when preparers focus their time and expertise on ensuring the accuracy of footnote details. Further, we believe that requiring detailed tagging of certain complex disclosures, those that naturally lend themselves to a narrative discussion rather than a tabular format, forces preparers to perform an exercise which, by its very nature, cannot achieve the end result desired. Ultimately, to properly understand all of the available information, one must read the footnote. 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Mr. Brent J. Fields Securities and Exchange Commission July 21, 2016 Page 12 * * * * * * * EEI and AGA appreciate the opportunity to provide our input on this Request for Comment. We would be pleased to discuss our comments and to provide any additional information that you may find helpful. Very truly yours, /s/ Richard F. McMahon, Jr. Richard F. McMahon, Jr. Vice President, Edison Electric Institute /s/ Patrick J. Migliaccio Patrick J. Migliaccio Senior Vice President & Chief Financial Officer Chairman of the American Gas Association Accounting Advisory Council 701 Pennsylvania Avenue, N.W., Washington, DC 20004  Telephone 202-508-5000, Fax 202-508-5542 Web Site http://www.eei.org 400 N. Capitol St., N.W., Washington, DC 20001  Telephone 202-824-7000, Fax 202-824-7115  Web Site http://www.aga.org Outside Views: Top Obama advisers press SEC on climate disclosure rule August 19, 2016 Citing historic flooding in Louisiana, top White House advisers are touting the administration's suite of policies to assess and adapt to climate risks as complimenting potential private sector efforts, though they also urge the Securities and Exchange Commission (SEC) to require publicly traded companies to disclose their potential “material” risks from global warming. Brian Deese, President Obama's top climate adviser, and Jeff Zients, director of the White House National Economic Council, penned an Aug. 18 op-ed in the Wall Street Journal in which they note that financial markets “suffer from an alarming lack of standardized and comparable climate-risk information, which keeps investors and policymakers from accurately incorporating these risks into their decisions.” “Combating climate change requires not only leveraging bold action by governments to cut carbon pollution but also harnessing the power of market forces with clear, uniformly disclosed assessments of climate-related economic risks,” they write. While markets have not yet developed such tools, the officials cite a slate of measures federal agencies have developed to begin to address the risks. They include just-proposed rules from Federal Emergency Management Agency (FEMA) to implement a tougher federal flood standard, similar pending rules for federally funded housing and transportation projects and the administration's new final guidance for how agencies account for climate effects in National Environmental Policy Act (NEPA) reviews. Those steps “are changing the way the federal government does business,” they say. But, they argue, “to deliver sufficient impact, this effort must involve government and the private sector working together to develop assessments of climate risks as well.” After highlighting 2010 SEC guidance encouraging corporations to consider disclosing their potential climate risks, the advisers say that “[c]learly, more aggressive action is needed” and suggest that the commission should advance more robust measures. “The SEC could adopt detailed and standardized industry-specific requirements for disclosure, and, once in place, aggressively hold public companies to account when it comes to those obligations to disclose.” Such information, they argue, would allow firms to “efficiently price climate risk and to spur innovation that could ultimately decrease the magnitude of these risks across the economy.” Their comments appear to refer to the SEC's proposed overhaul of its so-called “S-K” rules that outline disclosure requirements for publicly traded firms, with advocates urging the update to include requirements to disclose climate change risks. Deese and Zients also urged G-20 countries during their Sept. 4-5 meeting in China to endorse the approach and move toward developing international disclosure standards. Meanwhile, the FEMA proposal -- and similar future efforts on housing and transportation -- could force some in the private sector to begin accounting for one major climate impact, increased flooding risk. The proposal, which will be published in the Aug. 22 Federal Register, implements Obama's 2015 new flood standard for federal projects, which generally expands the definition of a “floodplain” and requires developers to study alternatives to move or alter the proposed project. In the new proposed rule, FEMA explains that for projects that it funds, it will adopt the definition of “floodplain” in the new flood standard, which includes three optional approaches. The options are: Building two or three feet above the historic 100-year floodplain standard, depending on whether the project is deemed critical; building above areas with a 0.2 percent chance of flooding, or a 500-year event; or building above a level crafted using “data and methods informed by best-available, actionable climate science." “In many cases, each of these approaches would result in a larger floodplain and a requirement to design projects such that they are resilient to a higher vertical elevation,” FEMA says in its proposed rule. The rule would also “require the use, where possible, of natural systems, ecosystem processes, and nature-based approaches in the development of alternatives for all actions proposed in a floodplain.” InsideEPA/Climate http://insideepaclimate.com/climate-beat/outside-views-top-obama-advisers-presssec-climate-disclosure-rule Wholesale Market Issues – Impact on Baseload Generation 2016 Board and Chief Executives Meeting – September 2016 While RTO and ISO markets have been operating for over 20 years, a number of organic and external factors are changing the generation mix as well as the services needed to maintain reliability. These include low natural gas prices, increasing use of behind-the meter, storage and renewable resources as well as state and federal public policy goals. These changes have led to questions about whether the wholesale markets are able to retain needed generation and whether the energy and ancillary services market signals reflect the true cost of operating the system. Premature retirements of baseload generation due to inability to recover costs have fueled these discussions. As detailed in the appendix, EEI has been actively engaged in issues related to price formation in the energy and ancillary services markets at FERC. However, to date, FERC has not taken significant action to help ensure that the market clearing prices reflect the true cost of operating the system and that resources are compensated for all of the reliability services that they provide to the grid. Going forward, these issues are likely to become more complicated as states increasingly enact policies to maintain baseload resources as well as to facilitate state public policy objectives. For example, on August 1, the New York Public Service Commission approved a Clean Energy Standard that in addition to approving renewable goals required load serving entities to purchase zero energy credits from generators to help preserve some nuclear facilities. In New England, in order to help build natural gas pipelines, state commissions are considering proposals that would allow electric distribution utilities to purchase firm pipeline capacity, recover the cost through customer rates and to release the capacity to gas-fired generators as needed. A complaint has been filed at FERC alleging that the proposal in New England subsidizes some generators at the expense of others, including baseload generation, and distorts wholesale market prices. This state activity has led to discussion within the RTOs and ISOs about the impact of state policies on wholesale markets and the changes needed to market rules to accommodate state public policy goals without distorting market principles. For example, the New England Power Pool is discussing ways to implement formal mechanisms to use competitive markets to decarbonize the generation fleet and PJM is discussing ways to address the confluence of market design and public policy goals. If challenged in court, these state actions will be evaluated under the April 19, 2016 United States Supreme Court decision in Kevin Hughes, Chairman, Maryland Public Service Commission et al. v. PPL EnergyPlus et al. S.Ct. Nos. 14-614, 14-623. The Court held that states cannot seek to increase generation capacity by forcing utility customers to make up the difference between a RTO’s competitive price and a fixed price guaranteed to be paid to the generator. The Supreme Court characterized its holding as limited, saying that it was not addressing “the permissibility of various other measures States might employ to encourage development of new or clean generation, including tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector.” While baseload generation resources are necessary to maintain reliability, and nuclear resources, in particular, are critical to meeting environmental goals, current regulatory and market polices present challenges to the viability of these resources. This is especially true in RTO/ISO markets, as baseload resources need to compete with other resources that have low or no fuel costs or that receive payments from outside of the market. While some of these issues, such as low natural gas prices, are market-based, others are created by out-of-market payments, either at the federal or state level. All of these factors ultimately impact clearing prices in the wholesale market. Going forward, as more renewables and behind-the-meter generation resources participate in the wholesale markets; these issues are likely to increase. The experience Wholesale Market Issues 2016 Board and Chief Executives Meeting – September 2016 in Germany with high prices, reliability issues and retirement of baseload generation highlights the need for coordination on these issues going forward to help maintain fuel diversity. EEI Board Leads  Charles E. Jones, President and Chief Executive Officer, FirstEnergy  Christopher M. Crane, President and Chief Executive Officer, Exelon Corporation Appendix Summary Energy Price Formation Activity at FERC A key issue for baseload generation is ensuring that the price signals in the energy markets operated by RTOs and ISOs reflect the true cost of operating the system. EEI has made this argument in a number of comments filed with FERC. Workshops on price formation in the energy and ancillary service markets were also held on September 8, October 28 and December 9 of 2014. The workshops focused on the existing market rules and operational practices related to the use of uplift payments, offer price mitigation and offer price caps, scarcity and shortage pricing and on how operator actions can affect prices. EEI filed post-workshop comments on these price formation issues on March 6, 2015. EEI’s comments supported the need to make the changes necessary to provide accurate price signals, in both the day-ahead and real-time markets, in order to promote efficient operation and resource adequacy. This would include observing the principles of (1) dispatchbased pricing so that cleared LMPs are as consistent as possible with marginal cost of operating the system and reflect actual system operating conditions as well as (2) minimizing out of market payments. EEI urged FERC to continue to focus on these issues and to ensure that the RTOs and ISOs are making progress on these issues by requiring periodic reporting. On September 17, 2015, FERC issued a NOPR proposing to revise its regulations to require each RTO and ISO to (1) settle energy transactions in its real-time markets at the same time interval it dispatches energy and settle operating reserve transactions in its real-time markets at the same interval it prices operating reserves; and (2) trigger shortage pricing for any dispatch interval during which a shortage of energy or operating reserves occurs. EEI filed comments, on November 30, 2015, supporting the proposals put forth by the Commission as an important first step in improving energy price formation. EEI’s comments also discussed that more needs to be done to improve the accuracy of price signals in both the day-ahead and realtime energy markets. FERC issued an Order on June 17, 2016 requiring RTOs and ISO to (1) settle energy transactions in its real-time markets at the same time interval it dispatches energy; (2) settle operating reserves transactions in its real-time markets at the same time interval it prices operating reserves; (3) settle intertie transactions in the same time interval it schedules intertie transactions and (4) trigger shortage pricing for any interval in which a shortage of energy or operating reserves is indicated during the pricing of resources for that interval, including transient shortages. On November 20, 2015, FERC issued an Order directing the RTOs and ISOs to file reports providing an update on its current practices and responding to questions on (1) pricing of fast-start resources; (2) commitments to manage multiple contingencies; (3) look-ahead modeling; (4) uplift allocation; and (5) transparency. The reports were filed with FERC on March 4, 2016. EEI filed comments on April 4 emphasizing the need to reduce uplift and improve transparency as they are foundational issues that lay the groundwork for other changes. EEI also recommended that the Commission require all the RTOs and ISOs 2 Wholesale Market Issues 2016 Board and Chief Executives Meeting – September 2016 to provide a status report or work plan, by a date certain, listing the price formation issues within their region that have already been addressed and those that remain to be addressed by priority. The project work plan would also include possible solutions, cost of implementation and the timeframe in which the RTO/ISO could reasonably address each price formation issue. On January 21, 2016, FERC issued a NOPR proposing to revise its regulations to require that each RTO and ISO cap each resource’s incremental energy offer to the higher of $1,000/MWh or that resource’s verified cost-based incremental energy offer. Under this proposal, verified cost-based incremental energy offers above $1,000/MWh would be used for purposes of calculating Locational Marginal Prices (LMPs). The proposed offer cap would apply to incremental energy offers in both the day-ahead and real-time energy markets and would be resource neutral. EEI filed comments on April 4 that supported the Commission’s proposal but cautioned that additional guidance to the RTOs/ISOs was needed to ensure that the cost verification process takes place within a timeframe that allowed the cost-based incremental energy offer to be submitted before the market clearing Summary Ancillary Services Activity at FERC Due to the increased integration and use of distributed generation, demand response, natural gas resources, and variable energy resources such as wind and solar, FERC is focusing on ancillary services and the changes needed to maintain reliability. FERC’s proposals to date, which EEI has supported, have involved changing FERC-approved interconnection agreements to require resources to provide ancillary services. On June 17, 2016, FERC issued an order eliminating the exemption for wind generation from the requirement to provide reactive power. On July 11, 2016, FERC issued an order requiring small generating facilities to ride through abnormal frequency and voltage events and not disconnect during such events. On February 18, 2016, FERC issued a NOI seeking comment on the need for reforms to its rules and regulations regarding the provision and compensation of primary frequency response for both new and existing resources and proposed to require all new generation resources to have capability to provide frequency response as a precondition of interconnection. On June 30, FERC held a workshop to discuss compensation for Reactive Supply and Voltage Control within the ISOs and RTOs. On July 28, 2016 EEI filed comments articulating member concerns about FERC practices that appear to conflict with the Federal Power Act by either requiring a rate filing upon a change in the generation fleet or referring the case to the Commission’s Office of Enforcement. While these cases help ensure that all resources will be required to provide the ancillary services needed to maintain system reliability going forward, they do not address the fact that baseload generation resources have been providing these services and that the ability of other types of resources to consistently provide these services is not determined. As such, the questions that need to be addressed are (1) what services are baseload generating resources currently providing to the grid; (2) are resources being compensated for the services that they provide to the gird and if not what changes need to be made; and (3) what services will be needed going forward, how should they be defined and compensated? 3 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Electric Storage Participation in Regions With Organized Wholesale Electric Markets ) ) Docket No. AD16-20-000 COMMENTS OF THE EDISON ELECTRIC INSTITUTE I. INTRODUCTION The Edison Electric Institute (“EEI”) respectfully submits the following comments in response to the Federal Energy Regulatory Commission’s (“Commission” or “FERC”) request for comments on electric storage participation in regions with organized wholesale electric markets operated by Regional Transmission Organizations (“RTO”) and Independent System Operators (“ISO”).1 Due to technological advances in storage technology and the increased use of storage technology, this is a timely request and EEI appreciates the opportunity to comment on this important issue. EEI is the association of U.S. shareholder-owned electric companies. EEI’s members comprise approximately 70 percent of the U.S. electric power industry, provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly employ more than 500,000 workers. With more than $100 billion in annual capital expenditures, the electric power industry is responsible for one million jobs related to the delivery of power, including the upgrading of existing infrastructure and the construction of new infrastructure. EEI’s diverse membership includes electric utilities operating in the energy markets operated by 1 Electric Storage Participation in Regions with Organized Wholesale Electric Markets, Docket No. AD16-20-000 (April 11, 2016) (“Request for Comment”). RTOs and ISOs and own electric storage as well as other resources participating in the markets. EEI members also own and operate the distribution grid to which some electric storage resources, will interconnect seeking seek to participate in the wholesale electric markets. As such, EEI members are directly affected by RTO and ISO market rules and operational practices regarding the participation of storage resources in the wholesale electric markets operated by RTOs and ISOs. II. COMMENTS Due to improvements in energy storage technology and equipment cost reductions, electric storage is growing as a resource. In 2015, there were 221 MW installed, up 243% from 2014. It is expected that energy storage installations, both behind the meter and grid scale, will amount to over 4,000 MW in the next five years.2 As such, this is an appropriate time to begin discussing whether RTO/ISO market rules or technical requirements need to be changed to support participation by new technologies and resources. The Commission started this discussion on April 11, 2016 with the issuance of a set of data requests to all of the RTOs and ISOs. The data requests sought to examine whether barriers exist to participation of electric storage resources in the capacity, energy and ancillary services markets operated by RTOs and ISOs. The RTOs and ISOs submitted their responses to these questions on May 16, 2016. EEI supports participation of electric storage resources in the RTO and ISO markets on a non-discriminatory basis with other resources. As such, integration of these resources should be done in a manner that recognizes the value and attributes that all resources provide to maintaining system reliability and resource adequacy. The differences in the RTO/ISO GTM/Energy Storage Association, U.S. Energy Storage Monitor, 2015 Year in Review Executive Summary, March 2016 2 2 responses to the data request highlight the substantial differences between the various regions as to the extent to which energy storage resources can currently participate in the various markets. These responses also illustrate that there are a wide range of efforts being made to facilitate participation of these resources going forward. Due to these regional differences, to properly address this important issue, each RTO and ISO should work with their stakeholder to identify barriers to entry, address concerns related to maintaining system reliability and modify market rules as needed to accommodate changing market conditions. While, EEI does not take a position on any of the filings or the specific barriers to entry in any particular market, as these issues will be addressed by individual EEI members who participate in each of the markets, there are some general issues that each of the RTOs/ISOs and the Commission should consider as they address how best to incorporate energy storage resources into their markets on a non-discriminatory basis with other resources. First, while none of the RTOs/ISOs explicitly exclude energy storage resources from eligibility to be a market participant, the market rules were often created before most energy storage technologies were available as grid resources. As a result, the market rules may be geared toward facilitating the use specific resources or resources types that were in use at the time the rules were developed. For example, bid parameters generally were originally designed for conventional generation with some modification for demand response or for specific storage technologies such as pumped hydro and flywheels. In some markets, energy storage resources, such as flywheels, may be limited to providing specific market products such as regulation service. These tariff and business rules may need to be modified for other energy storage technologies such as lithium ion and flow batteries that have different operating characteristics. 3 Energy storage includes a variety of technology types and systems. It should not be assumed that just because tariff language allows participation by some energy storage devices that all energy storage devices that are able to provide the service can participate feasibly under the existing market rules and operating conditions. Thus, the rules need to recognize the contributions of different energy storage technologies and how they can participate. EEI would suggest that market rules should be clarified or modified so that all resources that are capable of providing a product be able to participate in that market. Market products should be defined in a technology-neutral way so that market products and rules are geared toward the service needed rather than toward specific resource types. This will help ensure that product requirements and eligibility are tied to the underlying operational needs of the system and not the characteristics of specific types of generation. Making tariff language changes is only one step in the process as the existing exiting definitions and the limiting criteria may be built into the dispatch and related software through to settlement. In some cases, this technology neutral approach may require changes to the software being used by the RTOs and ISOs. Second, energy storage resources can be used to provide a variety of services such as ancillary services needed to support the transmission and distribution systems as well as energy products and potentially capacity products. Energy storage resources can not only provide a variety of services but they can provide different grid services which could help lower costs and enhance reliability. Thus, in order to maximize use of these resources, in evaluating the market rule and system changes necessary to integrate these resources, the RTOs/ISOs should consider, and the Commission should specifically encourage, allowing multiple uses of this technology. Rather than limiting the energy storage resource to only providing regulation service, for example, it could be allowed to provide another service that it is technically capable of providing 4 during the course of an hour or day. The rules and manner in which this is implemented would be determined by each RTO/ISO in conjunction with its stakeholders. Third, since behind-the meter resources are interconnected to the distribution grid and ultimately impact the transmission system, EEI members have an interest in ensuring that any actions taken by the RTO/ISO to allow these resources, including aggregated resources to participate in the wholesale markets, does not negatively affect the electric distribution company’s ability to maintain the reliability of the distribution system. Electric distribution companies are responsible for maintaining and reliably operating the distribution system which includes providing all customers with reliable and economic electric service, meeting reliability requirements, modernizing and replacing infrastructure as needed, accommodating new technologies, meeting public policy requirements and enhancing grid security. These challenges increase as more dynamic resources interconnect with their system and as more resources that are interconnected to their system seek to participate in the wholesale electric markets. As such, electric distribution utilities need to have visibility and input/control of the resources that are integrated to the distribution system for planning and operating purposes. In addition, in order to maintain system reliability, all resources that seek to participate in the wholesale markets must be treated in a non-discriminatory manner. In light of the foregoing, EEI request that the Commission require each RTO and ISO to provide additional information with respect to the ability of storage resources to effectively participate in their markets. Many of the RTOs and ISOs responded to the data requests simply by referencing their tariff provisions without elaboration as to how a storage resource would actually register for and participate in each market. Since the RTOs and ISOs are at varying stages in evaluating their market rules, it would be helpful for EEI members if each RTO/ISO 5 explains with greater specificity how different types of energy storage resources would participate in each of the markets, capacity, energy and ancillary services, operated by the RTO or ISO. Having each RTO/ISO respond to the same examples will help clarify the process within each RTO/ISO for all market participants, form the basis for stakeholder discussion going forward and possibility highlight best practices for discussion. As such, EEI requests that each RTO and ISO respond to the examples below with the information requested so that stakeholders can work with the RTOs and ISOs to better understand the existing rules for participation, and to facilitate discussion on how market rules may need to be modified to address barriers to entry. Examples In responding to the examples below please assume that energy storage resources optimize their own state of charge so that devices can maintain an acceptable availability in all periods offered and provide the following information: (a) Identify how the energy storage resource registers to participate in each of the markets operated by the RTO/ISO, how it bids, how it is dispatched and how it is settled, as well as any challenges (b) If an energy storage resource in not able to participate in a particular market, either due to market rules or technical capability, then the RTO/ISO should note that as well along with an explanation. (c) Identify all services that can be provided, with potential charges and penalties for each service (d) Identify any limitations on the RTO/ISO managing the state of charge  Small solar plus battery storage aggregation – 1 MW, 4 MWh aggregation of several individual collocated solar and battery storage units, interconnecting at different points on the distributed system, 4 hours of continuous operation, 8 hours to recharge, recharging both with energy off the grid and from solar panels with the primary purpose of the battery being to smooth the volatility of the 24hr curve  Wind combined with battery storage as a grid support system - transmission interconnected, co-located wind generation project and battery storage project, with 6 primary purpose of the battery storage project to provide wholesale services and secondary function of smoothing wind generation output  III. Grid scale energy storage resources such lithium ion or flow batteries - 5 MW , 20 MW, 100 MW CONCLUSION In conclusion, EEI appreciates the Commission’s focus and leadership on these issues and the opportunity to submit comments. EEI would encourage the Commission to continue to provide guidance to the RTOs and ISOs as they work to develop market rules that allow energy storage resources to participate in the wholesale markets on non-discriminatory basis with other resources. In order to provide additional clarity to help inform the discussions, the Commission should require each RTO and ISO to explain the process, as requested above. Respectfully Submitted, Richard F. McMahon, Jr. Vice President Lopa Parikh Senior Director, Federal Regulatory Affairs Edison Electric Institute 701 Pennsylvania Avenue, N.W. Washington, D.C. 20004 Phone: (202) 508-5058 Email: lparikh@eei.org June 6, 2016 7 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Reactive Supply Compensation in Markets Operated by Regional Transmission Organizations and Independent System Operators ) ) ) ) Docket No. AD16-17-000 COMMENTS OF THE EDISON ELECTRIC INSTITUTE I. INTRODUCTION Edison Electric Institute (“EEI”), on behalf of its member companies, hereby respectfully submits these comments in response to the questions raised by the Federal Energy Regulatory Commission (“FERC” or “Commission”) in its June 22 Supplemental Notice and discussed during the June 30, 2016 workshop.1 EEI is the association of U.S. shareholder-owned electric companies. EEI’s members serve approximately 70 percent of the U.S. electric power industry and its diverse membership includes electric utilities operating in all regions of the country, including in markets operated by regional transmission organizations (“RTOs”) and independent system operators (“ISOs”). EEI members own a diverse portfolio of synchronous and nonsynchronous generation resources that provide reactive power. As such, EEI members are directly affected by the issues raised in the Supplemental Notice, and these comments reflect their significant experience, expertise and insight with respect to such issues. 1 Reactive Supply Compensation in Markets Operated by Regional Transmission Organizations and Independent System Operators, Supplemental Notice of Workshop, Docket No. AD16-17-000 (June 22, 2016). II. COMMENTS In Order No. 888 the Commission listed reactive power as one of the ancillary services necessary to support the basic services of generating capacity, energy supply, and power delivery.2 The Commission therefore required all transmission providers to provide, and all transmission customers to pay for, reactive power pursuant to Schedule 2 of the Open Access Transmission Tariff (“OATT”). The North American Electric Reliability Corporation (“NERC”) affirmed the importance of reactive power in its December 2015 Essential Reliability Services Task Force Measures Framework Report which stated that “the ability to control the production and absorption of reactive power for the purposes of maintaining desired voltages is critical to the reliable and efficient operation of the power system.”3 Recognizing this critical need for reactive power, the Commission in Order No. 2003 required all large generating facilities to meet pro forma power factor requirements.4 The Commission has indicated that if a transmission provider pays its own or its affiliated generators for reactive power within the established range, it must also pay the interconnection customer.5 With respect to the provision of reactive power, Order No. 2003 requires that generators be paid for reducing real power output to supply or consume reactive power outside the required 0.95 2 Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888, FERC Stats. & Regs. ¶ 31,036 (1996), order on reh’g, Order No. 888-A, FERC Stats. & Regs. ¶ 31,048, order on reh’g, Order No. 888-B, 81 FERC ¶ 61,248 (1997), order on reh’g, Order No. 888-C, 82 FERC ¶ 61,046 (1998), aff’d in relevant part sub nom. Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002). 3 North American Electric Reliability Corporation Essential Reliability Services Task Force Measures Framework Report at 16 (2015). 4 Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003, FERC Stats. & Regs. ¶ 31,146 (2003), order on reh’g, Order No. 2003-A, FERC Stats. & Regs. ¶ 31,160, order on reh’g, Order No. 2003B, FERC Stats. & Regs. ¶ 31,171 (2004), order on reh’g, Order No. 2003-C, FERC Stats. & Regs. ¶ 31,190 (2005), aff'd sub nom. Nat’l Ass’n of Regulatory Util. Comm’rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007), cert. denied, 552 U.S. 1230 (2008). Pro Forma Large Generator Interconnection Agreement, section 9.6.1. 5 Order No. 2003-A, FERC Stats. & Regs. ¶ 31,160 at P 416. -2- leading to 0.95 lagging power-factor range.6 The Commission has not, however, mandated a single compensation mechanism with respect to reactive power capability. Within the RTOs/ISOs, there are regional differences in how generators are compensated for providing reactive power with some RTOs/ISOs only paying for reactive power provided outside of the required power-factor range (e.g., California ISO), others providing for support services (e.g., New York ISO), while others provide compensation for reactive power capability under cost-ofservice rates established under Section 205 of the Federal Power Act (“FPA”) (e.g., PJM). Without commenting on any of the specific regional approaches, EEI supports these regional differences and the ability of RTOs/ISOs to work with their stakeholders to determine the appropriate compensation methodology for their region. Through these comments, EEI would like to address some issues that were discussed at the workshop. These are the (1) use of the AEP methodology for determining cost-of-service rates and (2) treatment of rates filed under Section 205 of the FPA. A. The AEP Methodology for Calculating Reactive Power Rates Is Still Valid As discussed during the workshop, there is a cost associated with providing reactive power as, while the basic equipment is the same, the generator must be sized larger so that it has the increased capacity to provide reactive power while still maintaining its maximum real power output capability. This is true for all of the equipment to the point of interconnection.7 Maintenance associated with normal operation of the generator is required to preserve reactive capability. Degradation of equipment due to age has the potential to decrease the ability of a facility to provide reactive power, requiring additional repair costs. 6 Order No 2003 at P 542 and 546. 7 See e.g. Speaker Materials and statements of Jason Sine, PSEG Services Corporation, at the Reactive Supply Compensation Workshop, June 30, 2016 under Docket Number AD16-17-000 -3- Many utilities that have cost-of-service reactive power rates use the AEP methodology that was approved by the Commission in Opinion No. 440 to determine the rates for providing reactive power.8 The AEP methodology calculates a cost-of-service rate based on three components of a generation plant related to the production of reactive power: (1) the generator and its exciter; (2) accessory electric equipment that supports the operation of the generatorexciter; and (3) the remaining total production investment required to provide real power and operate the exciter. Since the same equipment is used to provide real and reactive power, this methodology develops an allocation factor used to sort the annual revenue requirements of the components between real and reactive power production. The AEP methodology remains a valid method to calculate the cost of providing reactive power. During the workshop, there was some discussion as to whether the amount paid for reactive power should change based on degradation of the equipment. EEI opposes this concept. Generation owners must have a reasonable opportunity to recover the fixed costs of installing their voltage support equipment, as well as the costs associated with making any repairs or upgrades that are needed over time. In addition, it has not been the Commission’s practice under the FPA or the Natural Gas Act (“NGA”) to require resources to change their rates due to the aging of equipment and there has not been any justification provided to change this traditional Commission practice in the context of setting reactive power rates. During the workshop, the use of testing data was suggested as a way to determine the amount of degradation of service. The use of test data is not appropriate for a variety of reasons. Test data for reactive output is not always readily available because abnormal or emergency system conditions are often required to obtain the maximum lead/lag reactive capability of the 8 American Electric Power Service Corp., Opinion No. 440, 88 FERC ¶ 61,141 (1999). -4- generator. The test data could also be different from the nameplate capacity for reasons other than the degradation of service such as increased operation and maintenance costs or a change in the fleet so the resource is used less often. Thus, reducing compensation based on test results would prevent generators from recovering their fixed costs and may discourage them from providing voltage service. Regular testing should be standard practice, but should not be the basis for compensation. To the extent that greater incentives are needed to encourage better performance, it should be achieved through other means. As such, the AEP methodology remains valid for calculating reactive power rates and should be retained. B. Fleet Based Rates Should Continue to be Allowed Under Cost-of-Service Ratemaking Sections 205 and 206 of the FPA give the Commission jurisdiction over a public utility’s rates, terms and conditions for transmitting or selling electric energy in interstate commerce. The rates, terms and conditions are required to be just and reasonable and not unduly discriminatory or preferential; otherwise, they are deemed unlawful. Rates are “established initially by the [public utilities]” under Section 205 of the FPA, and are subject to modification by the Commission only “upon a finding that they are unlawful” under Section 206 of the FPA.9 Under Section 206, the Commission must first find that the existing rate is unjust and unreasonable before it may require the utility to file a new rate that will only take effect on and from a lawfully established refund effective date. Absent this finding that the existing rate is 9 United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332, 341 (1956) (discussing Sections 4 and 5 of the Natural Gas Act (“NGA”)). Sections 4 and 5 of the NGA are “substantively identical” to Sections 205 and 206 of the FPA, FPC v. Sierra Pac. Power Co., 350 U.S. 348, 350 (1956), and provisions of the two statutes may be cited “interchangeably.” Arkansas La. Gas Co. v. Hall, 453 U.S. 571, 577 n.7 (1981). -5- unjust and unreasonable, the Commission does not have the authority to compel a generator to make a Section 205 filing.10 Thus, since the FPA was enacted and rates put on file, the practice has been that the filed rate, as approved by the Commission, is deemed to be just and reasonable until either a filing is made under Section 205 to change the rate or a Section 206 complaint alleging that the filed rates are unjust and unreasonable is filed and supported. Inherent in this arrangement is the understanding that the cost of service is constantly changing – costs go up - costs go down plants retire - new plants are added. Through all of this, the filed rate is deemed to be just and reasonable until it is changed through a Section 205 filing or a Section 206 proceeding. In many cases, owners of a generation fleet have used a fleet-based reactive power revenue requirement that has been accepted for filing by the Commission without specifying a revenue requirement for individual facilities or identifying which specific facilities within the fleet were supplying the reactive power. Since, over time, new resources may be added or existing resources may be upgraded or retired, as long as the reactive power requirement is met through the existing resources, a Section 205 filing was not always made simply because there may have been a change in the composition of the underlying generation fleet. This practice is consistent with decades of precedent involving cost-of-service ratemaking for both electric utilities and pipelines, under which rates are designed based on testperiod data and are locked in until the next rate filing by the utility or an investigation initiated by the Commission. The Commission has expressly recognized that this traditional cost-of- 10 See e.g. Atlantic City Electric Co. v. FERC, 295 F.3d 1 (D.C. Cir. 2009). -6- service ratemaking has the potential to create a time lag between changes in underlying facilities and adjustments to rates to reflect such changes: It is often the case that there is a time lag between the certification of new facilities and a reflection in the pipeline’s system-wide rates of the costs associated with the new construction and/or the addition of new shippers, because these factors are not considered until a rate case is initiated well after the new facilities are in place.11 EEI is concerned that the Commission has deviated from these ratemaking principles in recent cases by either requiring a rate filing upon a change in the generation fleet or referring the case to the Commission’s Office of Enforcement.12 Recent cases in PJM and MISO highlight these concerns. On November 20, 2014, the Commission issued an order requiring that PJM either (1) revise the PJM Tariff “to provide that a generation or non-generation resource owner will no longer receive [R]eactive [P]ower capability payments after it has deactivated its unit and to clarify the treatment of [R]eactive [P]ower capability payments for units transferred out of a fleet;” or (2) demonstrate why it should not be required to do so.13 On June 16, 2016, the Commission issued an order essentially requiring the same filing from MISO.14 In its compliance filing, PJM correctly indicated that it “does not have the authority to compel a Reactive Power [s]upplier to submit a filing under section 205 of the FPA to modify or cancel its existing [R]eactive [P]ower tariff or its [R]eactive [P]ower revenue requirement when a unit is deactivated,” and that it similarly lacks “the authority under section 205 of the FPA to 11 El Paso Natural Gas Co., 82 FERC ¶ 61,006, at 61,020 (1998). 12 EEI agrees with the comment made at the workshop by Mason Emnett on behalf of NextEra Energy Resources, LLC and Neil Levy, King & Spalding LLP, on behalf of the Electric Power Supply Association on this issue. 13 PJM Interconnection, L.L.C., 149 FERC ¶ 61,132 at P 1 (2014). 14 MidContinent Independent System Operator, 155 FERC ¶ 61,254 at P 1 (2016). -7- stop paying Reactive Power [s]uppliers in accordance with their fleet-based rate . . . .”15 PJM proposed revisions to Schedule 2 to the PJM Tariff requiring that, at least 90 days prior to deactivating or transferring a generation unit, a Reactive Power supplier either (1) submit a filing under Section 205 of the FPA to “terminate or adjust its cost based rate schedule to account for the deactivated or transferred unit;” or (2) “submit an informational filing explaining the basis for its decision not to terminate or revise its cost-based rate schedule . . . .”16 In a June 18, 2015 Order, conditionally accepting PJM’s proposed Revisions, the Commission agreed with PJM that neither PJM nor the Commission has the authority to compel a reactive power supplier to make a Section 205 filing.17 Despite this recognition, the Commission also indicated that “certain reactive suppliers may have continued to receive payments for [R]eactive [P]ower service for units which were no longer capable of providing that service,” and that the Commission had “previously referred this concern to the Commission’s Office of Enforcement for further examination and inquiry as may be appropriate.”18 This process appears to require generation owners to continue to update their rate schedules which, absent a Commission finding that the existing rate unjust and unreasonable under section 206 of the FPA, would have to be done by the generation owner under Section 205. On March 28, 2016, in an Order setting for hearing a Section 205 reactive power rate filing by the Wabash Valley Power Association, the Commission expanded on this issue. The Commission stated: 15 Compliance Filing Regarding Reactive Power Capability, Transmittal Letter at 7, Docket No. ER15-696-000 (filed Dec. 22, 2014). 16 Id. at 10. 17 PJM Interconnection, L.L.C., Order Conditionally Accepting Tariff Revisions and Directing Compliance Filing, 151 FERC ¶ 61,224 at P 26 (June 18, 2015). 18 Id. at P 27 -8- “We also reiterate that revenue requirements established pursuant to Schedule 2 of the pro forma Open Access Transmission Tariff are for Reactive Supply and Voltage Control, and are based on a particular level of reactive power capability for a particular generating unit or group of units. Where the Commission is aware of a generator owner receiving payments for a generating unit that is no longer capable of providing reactive power, or for a generating unit with degraded reactive power capability, the Commission will take appropriate action, including establishing a proceeding under section 206 of the FPA and/or making a referral to the Commission’s Office of Enforcement. In particular, if a generating unit is deactivated, or if the reactive power capability of a generating unit has degraded since the Commission approved the relevant reactive power revenue requirement (and the generating unit has not been refurbished or had generating equipment replaced), the payment for Reactive Supply and Voltage Control from that generating unit should reflect such circumstance.”19 These recent cases are troubling in that they, by default, deny generator owners their approved rate without due process. The PJM and MISO pro forma Schedule 2 rates cannot be de-coupled from the underlying approved revenue requirements. As a matter of law, a given generation owner’s reactive power revenue requirement remains just and reasonable, unless or until the generation owner files to change the rate under Section 205 of the FPA or a finding is made under Section 206 of the FPA that the current rate is unjust and unreasonable and a refund effective date is established. Given that the composition and capabilities of generation resources within a fleet revenue requirement can and do change over time (both in ways that may enhance or diminish reactive capability and response), it is not appropriate to assume that the retirement of a facility in and of itself warrants a reduction in the duly filed and approved rate as other units may have been added, upgrades may have been implemented or operational costs may have increased during the interim between filings. Just as with cost-of-service rates for electric transmission providers and natural gas pipelines, fleet-based revenue requirements are established based on the composition of the 19 Wabash Valley Power Association, Inc., Order Accepting and Suspending Proposed Rate Schedule and Establishing Hearing and Settlement Procedures, 154 FERC ¶ 61, 245 at P 28 (March 28, 2016). -9- generation fleet at one specific point in time but can remain just and reasonable even as the generation fleet changes over time because the level of required service continues to be provided by the units in the generation fleet over time. If the Commission feels that it needs additional information then it has the tools necessary to get that information. For example, the Commission can ask questions on its own through data requests to the utility. The Commission can also request and receive information from the RTOs/ISOs through stakeholder-approved processes. The Commission does not require a Section 205 filing to modify real power rates when a generator is retired from a fleet; similarly, there is no basis for requiring a Section 205 filing for reactive power rates when a generator is retired. Even if there may be cases in which the reactive power rates have become unjust or unreasonable due to changes in the portfolio, these situations should be addressed prospectively through a Section 206 complaint proceeding and not through actions that blur the distinction between Sections 205 and 206 as outlined in the FPA. III. CONCLUSION EEI appreciates the opportunity to submit comments and the Commission’s attention to this important issue. EEI supports the Commission’s decision to allow regional differences in reactive power compensation. In those areas with cost-of-service rates, EEI would urge the Commission to continue to support the use of the AEP methodology and to exercise its Section 206 rights as appropriate to ensure that rates remain just and reasonable without infringing on the generator’s Section 205 rights. - 10 - Respectfully Submitted, _________________________ Richard F. McMahon Jr. Vice President Lopa Parikh Senior Director, Federal Regulatory Affairs Edison Electric Institute 701 Pennsylvania Avenue, NW Washington, DC 20004-2696 lparikh@eei.org 202-508-5098 July 28, 2016 - 11 - Distributed Generation EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Net Energy Metering: State Regulatory and Legislative Activity Summary Strong net energy metering (NEM) activity continues in the states, and EEI continues to work closely with member companies. Over the past year, many state legislatures and regulatory commissions throughout the country continued to review and, in some cases, modify NEM rules. And private (or rooftop) solar advocates increasingly worked to achieve their goals through legislation to impose NEM requirements on regulators. There is a growing recognition among regulators of the cost shift from NEM to non-NEM customers and the need for reform. This was in evidence at the July NARUC meetings, which devoted two full sessions to discussions of NEM and ways forward. While most state legislatures have recessed for the year, we expect renewed and continued solar efforts aimed at legislation and even initiatives. Frequently, the triggering mechanism for the state-level debates regarding the future of NEM is either related to state statutory caps on NEM programs or the cost-shift issue.  The private solar advocates push for the caps to be increased or lifted altogether, while maintaining the NEM rates at retail or above.  Companies are seeking adjustments in the NEM rates, coupled with changes in rate structures, to address the cost shift, reduce the NEM subsidy, and create more appropriate rate signals for all DG activity. During the past two years: Nevada changed its rate structure to reduce the NEM cost shift and rate subsidy; Hawaii ended its NEM programs because of the cost of the subsidy; and, in California, although legislation was passed to reform NEM, regulators ultimately acted to maintain the status quo in the near term. Net Metering: Recent Key Highlights  CA recently retained most of the current NEM program for the short term: NEM at retails rate was maintained, but the minimum bill was increased to $10 per month from about $1 per month. However, CA provided for long-term change in the NEM rate structure and will revisit these issues in 2019.  In HI, a successor NEM program was adopted that replaced NEM with new tariffs for DG customers. DG production is now credited at the company’s avoided cost and a minimum bill of $25 for residential DG customers ($50 for small commercial) was implemented.  A successor NEM program was adopted in NV (separate rate class for DG customers, new revenue– neutral rates for NEM customers including a higher basic service charge and a lower volumetric rate, as well as a reduced credit for DG exports now compensated at the company’s avoided cost). However, since then, private solar advocates have tried to reverse NEM reforms and have advocated for the deregulation of the electricity market in the state. The Governor appointed a New Energy Industry Task Force. NV Energy supports grandfathering existing net metering customers, and this and other issues are under negotiation. The solar industry is behind an initiative effort to restore NEM. Distributed Generation EEI Fall Board and Chief Executives Meeting – September 6-8, 2016  In NY, the NYPSC, through its Reforming the Energy Vision and related proceedings, is considering DER valuation proposals to help transition from NEM to an interim successor program in the near term. The NYPSC also has begun a collaborative process to help establish a methodology for determining the full value of DER for a permanent successor program. The commission plans to use full valuation (potentially based on the locational marginal price of energy, plus additional values provided by a distribution-level resource) as the basis for eventual adoption of potentially significant compensation changes under a permanent successor program.  FL has an ongoing ballot initiative that would amend the Florida constitution by establishing the right of customers to own or lease solar equipment installed on their property to generate electricity for their own use.  Efforts to introduce value of solar (VOS) or value of DER approaches are underway in AZ, CA, GA, HI, MD, ME, MN, NY, and OR. Many other states have examined or decided they would examine some element of the value of DER. To date, MI has refined and adopted a VOS methodology proposed by Consumers Energy for its community solar program. MN has adopted a statewide VOS methodology and applied it to Xcel Energy’s community solar program. SC has adopted a statewide value of DER methodology and applied it to Duke Energy and South Carolina Electric & Gas DER programs that include NEM. Other recent activity in specific states includes:  AR: New NEM rulemaking process to implement 2015 law requiring cost-benefit analysis and rates that ensure company recovery of entire cost of providing NEM service.  IA: Temporary changes to two NEM tariffs, including: extension of NEM eligibility to additional groups of DG customers, increased NEM cap, credit roll-over limited to 1 year with the utility retaining half of that payment to support low-income customers, grandfathering. The changes will sunset in 3 years; IUB will then review results for potential permanent rule changes.  IL: Broad legislation (Next Generation Energy Plan) aimed at, among other things, reforming NEM by reducing the fixed customer charge for energy delivery by 50 percent.  MA: Rulemaking opened to implement new NEM law authorizing cap increases, a minimum bill for NEM customers, and lower compensation for systems more than 10 kW from the retail rate to 60 percent of the value of the retail rate after the state goal of 1,600 MW of solar capacity is met. Extension of SREC II program but with a slightly reduced payment for some projects. Rulemaking opportunity to reduce SREC II program costs, which are currently even higher than NEM.  ME: Intra-state collaborative efforts at phasing out NEM were stymied by large solar opposition and a Governor seeking to eliminate NEM.  MN: Changes to community solar rules: 1 MW system cap, VOS rate for community solar projects in 2017 and beyond. This is second VOS tariff approved for community solar; the first was approved in MI in 2015.  NH: New law doubled the cap to 100 MW. The Commission started a process to develop alternative NEM tariff. 2 Distributed Generation EEI Fall Board and Chief Executives Meeting – September 6-8, 2016  NJ: In 2015, the NEM cap was raised from 2.5 percent of peak electricity demand to 2.9 percent of total electricity sales in the state for the prior one-year period.  NM: Consumer protection legislation that set forth specific disclosure requirements for a distributed energy generation sale or lease agreement failed.  OK: Non-unanimous settlement in OG&E rate case provides that DG customers who use some of their output to serve on-site load would be required to take service on existing standard TOU rates. .OG&E did not join and opposes the settlement, which also would prohibit new demand charges and condition any future proposals for demand charges. Staff, AG, TASC, AARP, Federal Executive Agencies, Sierra Club, and several other parties joined the settlement; CA already has requirement for TOU rates for DG customers.  VT: Commission revised its NEM program to meet a statutory deadline, but will propose another rule after a reconsideration period. The commission said another proposed rule is needed because significant issues continue to emerge. 3 2016 Fall Board and CEO Meetings Environment The U.S. electric utility industry is facing a number of critical environmental policy and regulatory issues that impact company strategic planning and decision-making. These issues are spurring major changes in electric power generation and transmission, particularly in the context of an aging generation fleet, low natural gas prices, and both increased use of renewable energy and a focus on efficiency improvement. The September CEO meeting will include a brief discussion on coal ash in light of the recent re-engagement of the CEO Task Force and an update and discussion of next steps on the EEI environmental social governance and sustainability reporting initiative endorsed at the June meeting. EEI Board Leads: Gerard M. Anderson, Chairman, President & CEO, DTE Energy Co. Lynn Good, President & CEO, Duke Energy Greenhouse Gas Performance Standards On October 23, 2015, EPA published in the Federal Register the final guidelines for states to regulate carbon dioxide (CO2) emissions from existing fossil fuel-based power plants under Clean Air Act (CAA) section 111(d), i.e., the Clean Power Plan (CPP). In general, the final guidelines were responsive to certain issues and proposed solutions raised by EEI in comments. On February 9, the Supreme Court took the extraordinary step of staying the CPP during ongoing litigation brought by a number of states and other parties, including any eventual Supreme Court review. The stay was effective immediately and, accordingly, compliance with the September 2016 deadline to file state plans and other deadlines associated with the rule are now on hold. Oral argument in the underlying litigation is scheduled for September 27 before the full D.C. Circuit Court. Given the likelihood that the D.C. Circuit decision will be appealed to the Supreme Court, a final judicial decision on the challenges to the CPP is not likely until mid-2017 at the earliest. While the ultimate disposition of the CPP and GHG regulation under the Clean Air Act remains unclear in the near term, members have indicated that they are interested in using the time afforded by the stay to continue their educational efforts on various elements of carbon policy. In response, EEI is organizing a series of webinars/panel discussions on member-suggested topics, such as rate-based emission trading and CPP-related modeling and analysis. Notwithstanding the stay and the legal review of the CPP, the Obama Administration has signaled its intent to move forward domestically with efforts to reduce U.S. GHG emissions. For example, on June 30, EPA published in the Federal Register proposed design details for its proposed Clean Energy Incentive Program (CEIP) under the CPP. The CEIP is a voluntary program designed to incentivize new zero-emitting renewable energy and energy efficiency, with additional incentives given to projects in low-income areas. The proposal changes some of the eligibility criteria and time periods from those provided in the final rule. EEI will file comments by the September 2 deadline. EPA also has indicated that it plans to release the proposed model trading rules for the CPP in December. Environment 2016 Fall Board and CEO Meetings Simultaneous with publication of the final guidelines for existing sources, EPA published the final new source performance standards for new, modified and reconstructed fossil fuel-based units under CAA section 111(b). In the final rule, EPA set separate, achievable standards for new coal-based power plants (1,400 lb/MWh)—which can be met by a highly efficient supercritical plant using partial carbon capture and storage (CCS) or by an IGCC plant using co-firing with natural gas—and for NGCC units (1,000 lb/MWh). Nonbaseload units must comply with a clean fuel input-based standard of 120 lb/MMBtu, which effectively exempts simple-cycle units from the 1,000 lb/MWh standard. These changes are generally responsive to issues raised by EEI in comments on the proposed standards. In particular, the final standards for modified and reconstructed units altered the test for modification such that most units that retrofit with Mercury and Air Toxics Standards controls are not subject to unachievable CO 2 limits. These standards for new units also are the subject of ongoing litigation, but have not been stayed. EPA rejected petitions for reconsideration of these standards on April 29, particularly the determination that CCS has been “adequately demonstrated.” The new lawsuit briefing schedule means that oral arguments in the DC Circuit will occur next year. The Administration also signed the Paris Agreement—under which the U.S. committed to reduce its GHG emissions on an economy-wide basis 26-28 percent below 2005 levels by 2025—and intends to submit its acceptance of the Agreement to the United Nations by the end of the year. The Agreement has spurred myriad investor initiatives focusing on company disclosure of fossil fuel exposure and potential divestment of companies with significant coal-based holdings, including the electric power sector. In response, EEI is leading an environmental social governance and sustainability reporting initiative. Finally, on May 12, EPA released a final rule regulating methane emissions from new and modified sources in the oil and gas industry, and is implementing efforts to address existing sources. Coal Combustion Residual (CCR) Regulation On April 17, 2015, EPA published the final coal combustion residuals (CCR) rule, regulating CCR as a nonhazardous waste under Subtitle D of the Resource Conservation and Recovery Act (RCRA). The effective date of the rule was October 19. While industry achieved its primary goal—securing Subtitle D, nonhazardous waste regulations—the rule has serious flaws. Among them, the self-implementing nature of the rule will result in significant compliance issues for the industry, and the fact that EPA has left the door open to regulate coal ash as a hazardous waste creates additional long-term uncertainty for electric utilities. Because the rule is self-implementing, affected facilities must comply with the new regulations regardless of whether a state adopts the rule. Even if a state adopts the rule and incorporates its criteria into the state’s solid waste management program, the federal rule remains in place as an independent set of federal criteria. The rule neither requires regulated facilities to obtain permits nor requires states to adopt and implement the new rules, and cannot be enforced by EPA. The rule’s enforcement mechanism is for a state or citizen group to bring a RCRA citizen suit in federal district court against any facility that is alleged to be in noncompliance with the new requirements. As the industry moves to implement the rule and close CCR surface impoundments, environmental groups are working—through public outreach, media outlets and legal challenges—to force those disposal units to close by excavating the CCRs, the more costly and complicated closure option. This pressure will increase as utilities complete initial closure plans by October 17, 2016 and make those plans available to the public no later than November 16, 2016. The utility industry, through the Utility Solid Waste Activities Group (USWAG), continues to provide compliance assistance, including development of comprehensive analyses of the final rule and associated outreach materials, as well as obtaining interpretative guidance from EPA. EEI and USWAG, with support Environment 2016 Fall Board and CEO Meetings from company environmental and communications staff, have developed a new “toolkit” to support member company communications regarding implementation of the CCR rule. The toolkit consists of background materials on CCR management and generation, focusing on impoundment closure, fact sheets to legal summaries and technical papers, as well as messaging support and third-party voices on this important issue. USWAG has filed a legal challenge to the final rule, arguing that some elements are invalid because EPA overstepped its statutory authority and others were promulgated without proper notice and comment. Environmental groups also challenged the rule, arguing that the rule should be more stringent. Initial briefs were filed December 18, 2015, and briefing will be completed September 6. On April 18, EPA, USWAG and environmental petitioners agreed to settle certain claims in the litigation, which will be addressed in a follow-up rulemaking to be concluded by early 2019. Oral argument has not been scheduled but may occur in late 2016, and a decision from the D.C. Circuit is likely in early 2017. EEI, USWAG and other allies continue to advocate for legislation that would allow for the implementation of the CCR rule in an effective and practical manner. On July 22, 2015, the House passed H.R. 1734, the Improving Coal Combustion Residuals Regulation Act. The bill essentially would codify the CCR rule, establish national standards for CCR under RCRA Subtitle D, and allow states to create and enforce their own CCR permit programs. Companion legislation has been introduced in the Senate but has seen no movement. EEI, USWAG, the American Public Power Association and the National Rural Electric Cooperative Association are on record supporting this legislation as it would eliminate the practical and enforcement challenges associated with the self-implementing nature of the final CCR rule. Continued coordination with Members of Congress, federal agencies, state officials, and other stakeholders may be necessary to support compliance with the final CCR rule, and to support legislation addressing flaws in the rule and allowing the rule to be implemented by the states. Additional Resources: http://www.eei.org/issuesandpolicy/environment/MemberDocuments/CEOBoardBook/September2016/PCE0 82216CCRissuepaper.pdf Nationwide Permit Revisions EEI, UWAG, and the Waters Advocacy Coalition (WAC) individually filed comments in August on the U.S. Army Corps of Engineers (Corps) 2017 Nationwide Permit Revision Proposed Rulemaking. The proposed rulemaking amends and modifies the Nationwide General Permit regulations (NWP). Nationwide permits are one type of general permit authorizing specific activities in waters of the United States (WOTUS) that have minimal environmental impacts. There are 50 separate nationwide permits, at least 10 of which are crucial to the electric utility industry and govern such operations as utility lines, wetland and stream restoration activities, stormwater management, and renewable energy generation projects. These permits are issued for five-year periods and must be renewed every five years thereafter. The current nationwide permits expire in March 2017. EEI is generally supportive of the proposal. Our comments highlighted the relationship between the NWP program and the stayed WOTUS rule, encouraging the Corps to clearly indicate and apply the prior regulatory definition of WOTUS codified in 1986 and interpreted in 2008 guidance until such time if and the currently stayed WOTUS rule survives judicial challenges. If the WOTUS rule does survive judicial challenge, EEI encourages the Corps to move swiftly and reopen the NWP and increase the acreage limits and preconstruction notification (PCN) thresholds to account for the impact newly jurisdictional waters would have on the availability of NWPs. EEI’s comments also noted that the Corps properly determined that Environment 2016 Fall Board and CEO Meetings issuance or reissuance of NWPs has “no effect” on listed species or critical habitat and encouraged the Corps to add language to allow an applicant seeking authorization for the same activity covered by a previous Endangered Species Act consultation to demonstrate why a second consultation would not be required. Administration officials have expressed a desire to complete this rulemaking by January 2017. Waters of the United States (WOTUS) In October 2015, the Sixth Circuit granted a nationwide stay of the final WOTUS rule, which had become effective August 28, 2015. The final rule broadens the scope of waters subject to federal Clean Water Act (CWA) jurisdiction. The final rule was marginally improved from the proposed rule in several areas, yet will still trigger substantial new CWA regulatory requirements for critical utility operations—including generation, transmission and distribution—as well as the siting and construction of renewable energy sources. The final rule broadly defines tributaries, ditches and adjacent waters—which will be an avenue to exert jurisdiction over many industrial waters—and will pose implementation and compliance challenges for electric utilities. The broad assertion of jurisdiction also would subject utility projects that otherwise qualify for relatively streamlined permitting processes under nationwide or regional general permits to lengthier and costlier individual permit procedures, and to various other costs and uncertainties because more features would be deemed jurisdictional. This would increase costs of critical infrastructure projects and incrementally impede a smooth fleet transition to low-emitting generation sources. Implementation of the final rule will affect utilities and their customers, and is inconsistent with the Administration’s stated goals of promoting grid resiliency and construction and upgrades of generation, including renewable energy facilities. All generation and transmission activities effectively are subject to federal CWA permits and the resulting cost and project delays. UWAG is a petitioner in the consolidated cases before the Sixth Circuit. Briefing on the sufficiency of the administrative record is complete, and briefing on the merits of the Rule will begin this fall and continue through early 2017. UWAG counsel is coordinating with other industry and state petitioners and will lead briefing on issues affecting the electric utility industry. EEI supports litigation and Congressional efforts to obtain withdrawal, delay or modification of the final rule. If the rule ends up being implemented, EEI will continue coordination with companies and states regarding potential implementation challenges, as well as with stakeholders regarding further Hill and litigation strategy. National Pollution Discharge Elimination System (NPDES) Update Rule In May 2016, EPA proposed a number of revisions to its regulations governing issuance of National Pollutant Discharge Elimination System (NPDES) permits under the CWA section 402. Companies rely on these permits as authorization for activities that involve point source discharges of pollutants to WOTUS. While EEI supports changes aimed at clarifying and streamlining the NPDES permit program, such as EPA’s proposals to allow public notice via the internet rather than newspapers and to update lists of applicable best management practices, the proposal increases the amount and type of information permittees must provide and states must consider when processing NPDES permit applications. And, EEI objects to EPA proposals that exceed the agency’s authority and will increase the difficulty of obtaining, complying with, and continuing to rely on permits, including the administratively continued permit, dilution, and misstated antidegradation provisions. Accordingly, EEI and UWAG have called for the withdrawal of this proposed rulemaking. EEI will be working with the Agency and other Federal decisionmakings to seek appropriate modifications in the final rule expected later this year. Environment 2016 Fall Board and CEO Meetings Additional Resources: http://www.eei.org/issuesandpolicy/environment/MemberDocuments/CEOBoardBook/September2016/PCE0 82216NPDESissuepaper.pdf Steam Effluent Electric Guidelines The final Steam Electric Effluent Guidelines Rule became effective January 4, 2016. The rule sets strict technology-based effluent limitations that will force major technological and operational changes and upgrades, particularly at existing coal-based facilities. It has the potential to impact long-term investment decisions companies are making relative to compliance with the CCR and MATS rules and the Clean Power Plan, as it may cause marginal units to become unprofitable. The rule is complex and sets many different kinds of limits applicable to new or existing facilities. In summary, the rule sets very stringent requirements, among the most significant of which are the following:  A “no discharge” requirement for fly ash transport water at existing facilities, with a very limited exemption for fly ash transport water used as makeup water in a flue gas desulfurization (FGD) scrubber;  A very similar “no discharge” requirement for bottom ash transport water at existing facilities, again with a limited exemption for use as makeup water in an FGD scrubber;  A “no discharge” requirement for flue gas mercury control wastewater; and  Arsenic, mercury, selenium, and nitrate/nitrite limits based on physical/chemical and biological treatment for FGD wastewater. Collectively, FGD wastewater and bottom ash retrofits could cost hundreds of millions of dollars depending on plant configuration, size and fuel type. Additional costs may include the siting, construction and permitting of new landfills to receive dry bottom ash. In the final rule, EPA essentially allows a maximum of eight years for compliance with the new best available technology limits for existing sources. The new limits do not apply until a date determined by the permitting authority, which would fall between as soon as November 2018 and as late as December 2023. In most cases, the rule suggests the applicability date would be 2018 unless the permittee is able to make a case for a later date. Accordingly, it is crucial companies quickly provide the permitting authority clear and convincing documentation why it should establish an applicability date closer to 2023. The final rule discusses factors permitting authorities should consider, including changes being made or planned at the plant in question in response to GHG and CCR regulations. EEI continues to work with UWAG to pursue legal relief—industry challenges have been consolidated with those filed by environmental petitioners in the Fifth Circuit—and with EPA to ensure that any implementation guidance provided to the states contains the most reasonable compliance options possible. Ozone National Ambient Air Quality Standards and Interstate Transport Interstate transport continues to be a complicated issue for the industry, with different actions underway related to the 1997, 2008 and 2015 ozone national ambient air quality standards (NAAQS). First, after the culmination of extensive litigation, EPA in 2014 established the Cross-State Air Pollution Rule’s (CSAPR) final 2015 and 2017 requirements to address the 1997 standards. Second, to address the 2008 standards, EPA proposed a “CSAPR Update” rule on which EEI submitted comments in February 2016. This proposed rule would affect 23 Eastern states and is expected to be finalized in summer 2016, followed by implementation starting in May 2017. EEI held meetings this summer with EPA and OIRA on this proposal. Environment 2016 Fall Board and CEO Meetings Separately, several East coast states have petitioned EPA under CAA sections 126 and 176A to impose restrictions on upwind states related to ozone NAAQS. EPA also announced that, by October 2018, states will have to address interstate transport obligations for the new 2015 ozone NAAQS. EPA plans to conduct modeling to identify upwind states that significantly contribute to downwind nonattainment and make such data available in fall 2016 through a Notice of Data Availability. The Agency indicates it will continue discussions with Eastern states and initiate discussions about transport pollution with Western states. EPA’s final 2015 ozone NAAQS became effective December 28, 2015. The Agency's final standard of 70 ppb was consistent with EEI's stance that, if EPA decided to tighten the standard, it should be to no lower than the top end of the proposed range. Several environmental groups challenged the 2015 standards as too lenient, while 10 states challenged the standards, citing inadequate scientific justification and attainability concerns. No states intervened in support of EPA. Final briefs are due September 12. EPA has announced numerous 2016 milestones related to implementing the new standard, including proposed revisions to its Exceptional Events Rule, which defines when states can ask EPA to exclude data from events such as wildfires in its regulatory decision-making (e.g., whether areas meet the standard); EEI submitted comments in February. In addition, EPA will issue guidance and proposed rules in 2016 addressing the non-attainment designation process and permitting. State non-attainment designations are due to be proposed by October 2016, followed by EPA’s final designations by October 2017. State compliance is required in the 2020 to 2037 timeframe, depending on the severity of an area's ozone problem. Legislation passed by the U.S. House of Representatives in June would extend the compliance period for the 2015 standard and the process for evaluating and updating NAAQS. Regional Haze EPA continues to be active on the topic of regional haze (visibility). EEI submitted extensive comments in August on EPA’s proposed regulations to substantially revise how states address regional haze planning and emission reduction requirements for the period of 2019-2028. EEI also submitted comments on EPA’s draft guidance to implement the new program. On July 15, the 5th Circuit granted petitioners' motion to stay EPA’s Federal Implementation Plan (FIP) for regional haze in Texas and denied EPA's motion to dismiss or to transfer the case to the D.C. Circuit Court of Appeals. Petitioners including Luminant, Southwestern Public Service Company, the IBEW and the state had challenged EPA's action disapproving Oklahoma's and Texas's plans for controlling regional haze and imposing a FIP requiring FGD retrofits and upgrades. The court granted the stay noting petitioners' "strong likelihood" of prevailing on the merits. Importantly, on August 17, all of the parties to the Texas case filed a joint motion for a 90-day stay of the proceedings to accommodate settlement discussions. This is a positive development as it signals that EPA/DOJ recognize the potential for a more significant loss in court. The court granted this motion to stay proceedings until November 28. Finally, EPA also issued a state decision affecting power generators in Utah and soon will announce a final rule regarding Arkansas power generators, raising challenging issues regarding electric generator retrofit control stringency and timing. Transmission Siting Barriers to obtaining federal permits in a timely manner are delaying the siting and construction of new electric transmission lines needed to maintain reliability, enhance resiliency, and deploy clean energy projects. Environment 2016 Fall Board and CEO Meetings The Administration has launched initiatives to improve the siting and permitting of electric transmission lines. The Rapid Response Team for Transmission (RRTT) was established to streamline siting and permitting of proposed transmission line projects that require review by multiple federal agencies. The composition of the RRTT included the Council on Environmental Quality (CEQ) and each of the federal agencies involved with transmission siting and permitting. EEI has met regularly with CEQ and the participating RRTT agencies to provide recommendations on what needs to happen on the ground to expedite the permitting of transmission projects. President Obama issued a Presidential Memorandum (PM) and an Executive Order (EO) in 2013 intended to modernize the federal permitting and project review process for major infrastructure of national importance including electric transmission. The RRTT has been absorbed into these initiatives through the Steering Committee on Federal Infrastructure Permitting and Review (Steering Committee), which was established under the EO. EEI has held regular meeting with the federal land management agencies subject to the PM and EO to advocate the need to address to obstacles encountered by member companies at the individual transmission project level. The Department of Energy (DOE) proposed the Integrated Interagency Pre-application (IIP) Process to improve the performance of federal siting, permitting, and review processes for transmission. EEI and member companies provided recommendations a DOE formal request for Information. DOE issued a notice of a proposed rulemaking for the IIP Process in February 2016. EEI’s comments welcomed efforts to improve the efficiency, effectiveness, and predictability of these processes through early engagement and interagency coordination among entities with permitting authority. A final rule on the IIP currently is under review by OMB and is expected to be issued by the end of 2016. EEI met with OMB’s Office of Information and Regulatory Affairs to emphasize what is needed in the final rule for the IIP Process to result in meaningful improvements in federal environmental review and permitting of electric transmission. The Energy Bill being considered the House and Senate Conference includes provisions to improve transmission siting and permitting. Section 2308 of the Senate bill includes language to establish the RRTT as an “interagency Rapid Response Team for Transmission” with a transmission Ombudsperson designated to resolve interagency and intra-agency permitting delays. Some of the Quadrennial Energy Review siting and recommendations advocated by EEI have been incorporating in the Senate energy legislation. EEI is advocating that the House and Senate conferees include the section 2308 siting and permitting language in the final energy legislation. The Fixing America's Surface Transportation Act (FAST Act), enacted in December 2015, includes measures to remove barriers to federal agency permitting of major infrastructure including electric transmission. Section 41 of the FAST Act establishes a Federal Permitting Improvement Steering Council comprised of chief environmental review and permitting officers or “CERPOs” from each federal agency. The legislation also institutes a federal Permitting Dashboard, which lists qualifying projects along with lead agencies and targeted completion dates for environmental reviews. Implementation of the provisions is being managed by OMB and CEQ. EEI has met with OMB and CEQ on multiple occasions to advocate improvements needed for transmission siting and permitting. EEI has advocated the need for FAST 41 implementation to incorporate the work of the RRTT and the proposed DOE IIP Process. EEI also facilitated OMB’s request for information with member companies on FAST 41 implementation. President Obama issued, in November 2015, a PM directing the Departments of Defense, Interior and Agriculture, EPA, and all bureaus or agencies within them to adopt clear and consistent approaches for avoidance and minimization of, and compensatory mitigation for, the impacts of their activities and the projects the agencies review. The PM outlines a number of concrete steps to be taken by agencies to codify Environment 2016 Fall Board and CEO Meetings the administration’s mitigation objectives in their rules, guidance and policies. Implementation of the PM could impact the manner in which mitigation is required for electric transmission projects. EEI arranged for CEQ staff to brief the Environment Executive Advisory Committee (EEAC) on the PM and address EEAC questions and concerns. EEI also has addressed the mitigation issue with the Bureau of Land Management, Fish & Wildlife Service (USFWS) and the U.S. Forest Service. Endangered Species Act As the number of new species and critical habitat being listed under the Endangered Species Act (ESA) grows, so too does the creative use of the ESA by federal agencies and environmental groups have an increasing adverse the impact on electric supply and delivery operations. EEI, the Avian Power Line Interaction Committee (APLIC), the Energy Wildlife Action Committee (EWAC), the National Endangered Species Act Reform Coalition (NESARC), and UWAG are working collaboratively to address the growing number of ESA-related challenges facing the electric sector. The advocacy efforts are taking place on the programmatic and species specific levels. EEI will continue to advocate for improved implementation of the ESA through legislation. As the result of the 2011 settlement agreement reached by the USFWS and several environmental advocacy groups, there has been a sharp increase in ESA listings by the Service. Some of the species being listed or considered for listing, and the corresponding designation of critical habitat, cover vast amounts of land, often across multi-state regions. The uptick in listings, critical habitat designations and overall implementation of the ESA increasingly is in conflict with federal reliability requirements and environmental regulations. EEI and its coalition partners have advocated these concerns with USFWS senior staff and OMB. In 2015, USFWS expressed its intent to improve ESA implementation and recently finalized many regulatory reforms, including two critical habitat rules and a voluntary pre-listing credit policy. USFWS also is creating more ESA Section 4(d) rules for species listed as “threatened.” Special ESA Section 4(d) rules, while providing greater flexibility for utility operations, do not ameliorate the ESA-related difficulties electric utilities can face when constructing and operating generation and transmission facilities. Environmental groups continue to challenge “threatened” listing decisions and new 4(d) rules in an effort to deter their use and implementation. EEI strongly supports use of the 4(d) rule where appropriate and has advocated this position with the USFWS. Avian Protection APLIC is responsible for managing issues related to the Bald and Golden Eagle Protection Act (BGEPA), Migratory Bird Treaty Act (MBTA), and ESA. Federal agency implementation of these Acts in certain cases is inconsistent across regions, both within individual agencies and among the various federal land management agencies. EWAC also is addressing the avian species with regard to renewable energy projects and other electric facilities. APLIC and EWAC have met with USFWS on a regular basis to address these issues at the programmatic and site specific levels. USFWS has proposed establishing programmatic incidental take permits under the MBTA. Such a permit, if properly implemented, could provide utilities with decreased risk from prosecution if companies develop and follow an avian protection plan. There have been differing opinions among U.S. circuit courts as to whether or not the MBTA prohibits incidental (unintentional) “take” of migratory birds. This has created uncertainty over the scope of legal liability for incidental take of migratory birds. USFWS is working to develop a redefinition of what constitutes intentional and incidental take under the MBTA by the end of the Obama Administration. Industry-specific requirements for MBTA incidental take permits will be promulgated by USFWS in 2017 and 2018. APLIC has advocated in multiple meetings that, if such a permitting system is to Environment 2016 Fall Board and CEO Meetings be implemented, it must be very simple and recognize the limited staff resources USFWS has to issue the permits in a timely and effective manner. USFWS developed a permitting program in 2009 under the BGEPA. Unfortunately, only a handful of BGEPA permits have been issued for T&D facilities and wind energy projects. APLIC and EWAC have met with USFWS and CEQ to explain the difficulties electric utilities and wind energy face in applying for BGEPA permits. APLIC and EWAC submitted comments In July 2016 on the USFWS proposed rule to update the BGEPA permitting system. APLIC expressed support for certain provisions of the proposed rule that would clarify and improve the functionality of the eagle permit program. However, APLIC stated concerns over how the proposed rule would be specifically onerous for siting and operating electric power lines and requested USFWS to clarify the eagle rule as applied to different industries. Vegetation Management Electric utilities continue to experience significant delays when trying to gain access to their rights-of-ways (ROWs) located on federal lands to perform vegetation management activities. In light of federal electricity reliability guidelines related to vegetative management and the need to reduce the threat of catastrophic forest fires, EEI continues to advocate that the land management agencies—BLM, U.S. Forest Service, USFWS, and the National Park Service—have consistent policies and timely decision-making when it comes to protecting power lines on federal lands. EEI also continues to advocate for regulatory and legislative improvements to impediments to vegetative management activities on federal lands and streamlined access to ROWs to ensure power line safety. EEI reached agreement with the federal land management agencies to update and renew the 2006 Memorandum of Understanding (MOU) to facilitate cooperation and coordination among parties regarding vegetation management within and immediately adjacent to existing and future electric transmission line ROWs and associated facilities. The formal signing of the MOU—involving EEI and the heads of several land management agencies—will take place in fall 2016. H.R. 2358, the “Electricity Reliability and Forest Protection Act,” promotes federal land management agency consistency, accountability, and timeliness as it relates to permitting vegetation management activities for electricity transmission and distribution lines on federal lands. H.R. 2358 was included as an amendment to the North American Energy Security and Infrastructure Act of 2015 passed by the House in December 2015. EEI testified in support of the legislation in legislative hearings. EEI is advocating including these provisions in the energy bill being considered by the House and Senate Conference Committee. Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Haley Barbour Former Chairman, Republican National Committee and Former Governor of Mississippi Haley Barbour, the former governor of Mississippi and former chairman of the Republican Governor’s Association, is one of the top political strategists in the country. Barbour put Mississippi on a new path in job creation, education, health care, and energy. Exclusively represented by Leading Authorities speakers bureau, Barbour speaks on politics, elections, Republican strategy, the economy, job creation, and leadership. Previously Barbour successfully served twice as chairman of the Republican National Committee. In 1994, under Barbour’s chairmanship, Republicans won the greatest midterm majority sweep of the 20th century, winning GOP control of both houses of Congress for the first time in 40 years. After his stint as head of the RGA, POLITICO called Barbour “the most powerful Republican in politics.” He also returned to Barbour, Griffith, & Rogers (BGR Group), a lobbying group he helped found in 1991. Leadership in the Storm. Governor Barbour has been praised for his handling of both the Gulf Oil Spill and Hurricane Katrina. He worked tirelessly and innovatively with local, state, and national leadership to tap into many resources of assistance for victims of Hurricane Katrina. He created the Governor’s Commission on Recovery, Rebuilding, and Renewal to develop opportunities for South Mississippi to rebuild bigger and better than ever. Barbour also continued the good management practices and award-winning stewardship of about $24 billion in federal funding received after Katrina for housing, infrastructure, and a wide variety of other recovery work, including more than $5 billion where the state was given unprecedented control. He is also the author of America’s Great Storm: Leading through Hurricane Katrina, which explores leadership during a crisis. Mississippi’s Chief Executive. Governor Barbour’s first election in 2003 marked the largest voter turnout in Mississippi gubernatorial history, and he was reelected in 2007 with 58.2% of the vote. The Yazoo City, Mississippi, native is only the second governor since Reconstruction to be elected to a second consecutive term as Mississippi’s chief executive. He has focused on civil justice reform, controlling spending, prudent management of the state health care program, and new attention on Mississippi as an energy producing state that can help meet America’s energy needs in the future. Speaker Biography – Haley Barbour EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 In June 2009, Governor Barbour assumed the role of chairman of the Republican Governors Association and served until after the November, 2010, elections. During Barbour’s chairmanship, Republicans went from 22 to 29 governors. Awards and Honors. For his leadership after Katrina, Governor Barbour was awarded the Thomas Jefferson Freedom Award, which is presented to a nationally recognized leader by the bipartisan American Legislative Exchange Council. He was also named Governor of the Year for 2006 by Washington, D.C.-based Governing magazine; awarded the Gulf Guardian Award by the U.S. Environmental Protection Agency for his work to rebuild and protect sensitive Coast ecosystems; and received the 2008 Adam Smith Medal from BIPAC for his pursuit of the principles of free enterprise as Mississippi’s 63rd governor. Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Stephanie Cutter Democratic Strategist Stephanie Cutter is a founding partner at Precision Strategies, a communications, digital and data targeting consulting firm in Washington DC and New York City. Her political and communications experience spans two decades in public service and the private sector; crafting communications and crisis-management strategies for the White House, US Senate, and the nation’s leading political campaigns and corporations. After helping to elect the President in 2008 and serving in the White House, Stephanie was President Obama’s 2012 Deputy Campaign Manager in charge of communications, media, policy, and research as well as being a member of the senior strategy team. Stephanie sits on the boards of Organizing for Action, the University of Chicago Institute of Politics, the Edward M. Kennedy Institute for the United States Senate, and in 2013, she was appointed to the President’s Committee on Arts and Humanities. A Massachusetts native, Stephanie lives in Washington, DC, and is a graduate of Smith College and Georgetown University Law Center Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Sean McGarvey President, North America’s Building Trades Unions A glazier by trade, Sean McGarvey is the President of the North America's Building Trades Unions. Sean began his career in 1981 in Philadelphia, PA with Glaziers Local Union 252 of the International Union of Painters and Allied Trades (IUPAT), and subsequently worked his way up through various leadership positions within the IUPAT. In 2005, he was elected Secretary-Treasurer of North America's Building Trades Unions. In 2012 Sean was unanimously elected by the Governing Board of Presidents of North America's Building Trades Unions, and was unanimously re-elected in 2015 by the delegates to the 69th Convention of North America's Building Trades Unions. Sean currently serves in various capacities for the following organizations: ● ● ● ● ● ● ● ● ● Co-Chair of the Oil and Natural Gas Industry Labor-Management Committee - a unique partnership between America's Building Trades Unions and the American Petroleum Institute (API) Co-Chair of the Chemical Industry Labor - Management Committee Member; US Council on Competitiveness Secretary-Treasurer - the Union Labor Life Insurance Company (ULLICO) Treasurer- National Alliance for Fair Contracting, Inc. Chairman of the Board of Directors - National Coordinating Committee for Multi-Employer Plans Chairman of the Board - CPWR, The Center for Construction Research and Training Labor Co-Chair of the Center for Military Recruitment, Assessment, and Veterans Employment (CMRAVE) which operates the "Helmets to Hardhats" program ● Board of Directors Diabetes Research Institute (DRI) Sean also serves on several other union construction industry labor-management committees. Sean holds a Bachelor of Arts Degree from the National Labor College; and is a graduate of the Harvard University Trade Union Program. Customer Solutions EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Business Opportunities to Meet Customer Needs Customer needs and priorities are rapidly changing, thanks in part to new and increasingly affordable technologies, enabled by public policies that promote greater adoption. Electric power companies are thus challenged with empowering their customers with more choices and control, while ensuring that electricity supplies are safe, reliable, affordable, and clean. These new customer demands necessitate that utilities offer more individualized products and services that, in many cases, require regulatory flexibility. These offerings must also be financially sustainable and pass regulatory scrutiny. Due to the number of financial and regulatory constraints that are impacting electric power company’s ability to quickly develop and implement products and services that address the changing customer environment, this panel will explore opportunities to: 1) enhance revenues; 2) overcome regulatory barriers; and 3) meet customer needs. Topics include: smart cities, municipalization, microgrids, electrification, rate reform, customized products and services, energy efficiency, stakeholder education and engagement, access to customer data and information, consumer protection, peak demand growth and large customer coordination. The goal is an interactive and strategic discussion resulting in policy priorities going forward. Moderator: Tom Fanning, Chairman, President and CEO, Southern Company Discussants: Ralph Izzo, Chairman, President and CEO, Public Service Enterprise Group Robert P. Powers, Chief Operating Officer, American Electric Power Scott Prochazka, President and CEO, CenterPoint Energy William Von Hoene, Senior Executive Vice President and Chief Strategy Officer, Exelon Corporation Flexible Green Tariffs Increasingly Provide Renewable Energy to Corporate Customers EEI Fall Board and Chief Executives Meeting September 7, 2016 Colorado Springs, CO Examples of corporations with publicly announced renewable energy goals 2 1 What’s Driving Large Customers in Their Pursuit of RE?*  Meet corporate sustainability and/or GHG reduction goals.  Enhance corporate image with their customers, general public, employees.  Shareholder and NGO pressure -     Increasing scrutiny for “additionality” Price certainty Increasingly attractive ROIs and paybacks Mitigate power disruptions Keep up with competitors * Data for EEI dialogue with WWF-WRI corporate buyers, EEI National Key Accounts survey, and PWC survey 3 EEI and member companies are engaged with corporate energy buyers  60% of Fortune 100 and 43% of Fortune 500 companies have a climate or renewable energy goal - Sustainability goals, image, shareholder pressure, reliability, price certainty, etc.  Collaborative among EEI, World Resources Institute, and World Wildlife Foundation - Renewable energy corporate buyers’ principles – 58 signatories representing $5 trillion in market cap (mid-2016)  Signatories pledged to procure 44 million MWh of renewable energy by 2020 to meet sustainability goals.  Corporate buyers are engaging with regulated electric companies. 4 2 Companies are increasingly providing RE to corporate customers under green tariffs Corporate Renewables Contract with Regulated Electric Utilities 700 605 MW 600 Under negotiation MW Contracted 500 400 340 MW Announced so  far this year Anon. ‐ Duke Energy 300 Google ‐ Duke Enegy Apple ‐ NV Energy 200 Switch ‐ NV Energy 112 MW Anon. ‐ Duke Energy 100 Microsoft ‐ Dominion Power (VA) 20 MW 0 Switch ‐ NV Energy Walmat ‐ Alabama Power Apple ‐ NV Energy 2013 2015 2016 Under Negotiation 5 Green tariffs at a glance Source: World Resources Institute 6 3 U.S. Department of Transportation Smart City Challenge 44 EEI Member Companies serve 75 cities in 31 states American Electric Power AEP Ohio Canton, OH Columbus, OH* Public Service Company of Oklahoma Tulsa, OK SWEPCO Shreveport, LA Dominion Newport News, VA Norfolk, VA Richmond, VA Virginia Beach, VA Kansas City Power & Light Company Kansas City, MO* DTE Energy Company Detroit, MI Port Huron/Marysville, MI Madison Gas & Electric Company Madison, WI Alliant Energy Des Moines, IA Duke Energy Charlotte, NC Greensboro, NC Greenville, SC Orlando, FL Raleigh, NC St. Petersburg, FL Ameren St. Louis, MO Arizona Public Service Company Scottsdale, AZ AVANGRID New York State Electric & Gas Albany/Schenectady/Troy/ Saratoga Springs, NY Buffalo, NY Rochester Gas & Electric Rochester, NY The United Illuminating Company New Haven, CT Avista Utilities Spokane, WA Baltimore Gas & Electric Company Baltimore, MD Berkshire Hathaway Energy MidAmerican Energy Company Des Moines, IA NV Energy Las Vegas, NV Reno, NV Consolidated Edison Yonkers/New Rochelle/ Mt. Vernon, NY Duquesne Light Company Pittsburgh, PA* Entergy Entergy Louisiana Baton Rouge, LA Entergy New Orleans New Orleans, LA LG&E and KU Louisville, KY National Grid Albany/Schenectady/Troy/ Saratoga Springs, NY Providence, RI Oklahoma Gas & Electric Company Oklahoma City, OK Tulsa, OK Pacific Gas & Electric Company Fremont, CA Fresno, CA Oakland, CA Sacramento, CA San Francisco, CA* San Jose, CA Pepco Eversource Energy Boston, MA Washington, DC PNM FirstEnergy The Illuminating Company Cleveland, OH Ohio Edison Akron, OH Canton, OH Toledo Edison Toledo, OH Florida Power & Light Company Miami, FL Indiana Power & Light Company Indianapolis, IN Albuquerque, NM Portland General Electric Portland, OR* Public Service Electric & Gas Company Jersey City, NJ Newark, NJ Puget Sound Energy Seattle, WA San Diego Gas & Electric Company Chula Vista, CA Oceanside, CA Southern California Edison Long Beach, CA Moreno Valley, CA Riverside, CA Southern Company Alabama Power Company Birmingham, AL Montgomery, AL Georgia Power Company Atlanta, GA Brookhaven, GA Columbus, GA Tampa Electric Tampa, FL Tucson Electric Power Tucson, AZ Xcel Energy Denver, CO* Minneapolis/St. Paul, MN Other applicant cities: Anchorage, AK Austin, TX* Chattanooga, TN Jacksonville, FL Lincoln, NE Lubbock, TX Memphis, TN Nashville, TN Omaha, NE Tallahassee, FL * Finalist City 8/22/2016 Columbus' victory in Smart City Challenge propelled by public/private partnerships U.S. Reps. Steve Stivers, Pat Tiberi and Joyce Beatty - Columbus - … Public­private partnership propelled Columbus' Smart City win Jun 22, 2016, 7:37am EDT Collaboration between government and the private sector appears to have catapulted Columbus to victory in the competition for $50 million in federal transportatation grants. The city beat out 77 other cities to win the U.S. Department of Transportation’s Smart City Challenge, which awards $40 million to a city to kick off new transportation strategies. Vulcan Inc., a company founded by Microsoft Corp. co-founder Paul Allen, kicked in another $10 million. JOHN LAUER Columbus skyline, April 10, 2015 That the government and private business joined forces in this competition is apropos for Columbus,which is known for that sort of private/public partnerships. Indeed, it's what led to Columbus winning the competition, according to several people with knowledge of the process. U.S. Rep. Steve Stivers, a Republican, said federal transportation officials told him the community’s engagement helped their bid. U.S. senators and representatives, Democrats and Republicans, all worked with business and city leaders to show the department just how much Columbus wanted to win. “We all put together just an incredible amount of effort, that’s what I heard,” Stivers said. “It wasn’t just a city coming forward, it wasn’t just a county coming forward – it was a http://www.bizjournals.com/columbus/news/2016/06/22/public-private-partnership-propelled-columbus.html?s=print 1/2 8/22/2016 Columbus' victory in Smart City Challenge propelled by public/private partnerships U.S. Reps. Steve Stivers, Pat Tiberi and Joyce Beatty - Columbus - … community coming forward.” Organizations including Ohio State University, Battelle and American Electric Power Company Inc. have committed resources to the endeavor, led by the Columbus Partnership. Local businesses and governments agreed to put forth $90 million to expand the city’s smart efforts if the feds chose Columbus. That collaboration helped beat out some other interesting pitches. The mayor of Austin, Texas, said the smart city funds would help figure out the city’s “existential” mobility challenge. (The other finalist cities were Pittsburgh, Kansas City, Missouri, San Francisco, Portland, Oregon and Denver.) Rep. Joyce Beatty, D-Columbus, said the other cities made good pitches this month when they made final presentations in the nation's capital. That’s what makes Columbus’ victory even more sweet. “We had a true partnership in putting together a unique plan full of innovation for a stateof-the-art transit systems that are going to create jobs and connect neighborhoods,” she said. The city and the U.S. Department of Transportation declined comment, and are expected to formally make the announcement on Thursday in Linden, the low-income neighborhood that is set to test driverless cars to take residents to work. “Being born and raised in Columbus, this is a remarkable game-changer in such a positive way,” said U.S. Rep. Pat Tiberi, a Republican whose district includes part of Columbus. Tom Knox Reporter Columbus Business First http://www.bizjournals.com/columbus/news/2016/06/22/public-private-partnership-propelled-columbus.html?s=print 2/2 Collaboration Between Electric Power Industry and VW to Leverage EV Investments Background  The diesel emissions litigation settlement between Volkswagen (VW) and the U.S. and the State of California is an opportunity for electric companies to leverage settlement funds to support electric transportation market development. Two relevant components:  $2.7 billion Environmental Mitigation Trust: o Allocated to states. A lead agency for each state will submit a plan that describes how funds will be spent. Once approved, states can draw down funds from the trust to support projects. o Eligible projects may fund the replacement or retrofit of diesel engines with electric power or alternative fuel engines. A wide variety of trucks, buses, and non-road equipment are eligible; up to 15% of funds may be spent on light-duty EV charging infrastructure.  $2 billion ZEV Investment Commitment: o Investments planned and made by VW, subject to approval by U.S. EPA and California Air Resources Board. o ZEV Investments include charging infrastructure, education & outreach, and other initiatives that increase use of “ZEVs” (battery electric vehicles, plug-in hybrids, and fuel cell vehicles of all sizes). o Investment of $2 billion is split between California ($800 million) and the rest of the U.S. ($1.2 billion), to be planned in four 30-month cycles (see notional schedule below). Year Cycle CA U.S. 2017 2018 2019 1 $200 million $300 million 2020 2021 2 $200 million $300 million 2022 2023 2024 3 $200 million $300 million 2025 2026 4 $200 million $300 million Collaboration  A collaborative effort between electric companies and VW – primarily focused on the $2 billion ZEV investment plan – is needed to ensure that: o Electric company investments and VW investments are leveraged in an additive, complementary manner around a comprehensive, national vision. o All investments are reliably and affordably integrated into the energy grid and support grid modernization efforts through a joint planning effort. Proposal: Strategic Partnership Between Electric Power Industry and VW to Leverage EV Investments Edison Electric Institute Risks  VW investments could delay or halt electric company investment in electric transportation, as critical policymakers (e.g., regulators) may consider electric company investments to be unnecessary.  Electric companies may be asked to interconnect a charging infrastructure system that is suboptimally designed or located.  VW investments may be stretched too thin, across multiple sectors and technologies (e.g., hydrogen fuel cell infrastructure). Opportunities  Accelerate electric company investments in electric transportation (“filling in the map”) by providing a coordinated effort for companies to execute against.  Help make the case to regulators: de-risk electric company investments by leveraging private funds.  Advance grid modernization efforts by investing in the infrastructure necessary to electrify the transportation sector and integrate the energy needs of smart, sustainable communities. Next Steps  EEI is developing a framework for collaboration between electric companies and VW that will leverage investments and mitigate risks.  Urgency is critical, as VW planning is already underway. Some expected milestones include: o Mid-October: settlement agreement approved o November: VW solicits input on plans from states and municipal governments o Early 2017: VW submits investment plan to EPA and CARB for approval September 2016 2 OSHA Report EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Electronic Recordkeeping / Anti-Retaliation Rule On May 12, 2016, OSHA issued a final rule titled, “Improve Tracking of Workplace Injuries and Illnesses.” The final rule introduces new electronic reporting obligations for certain employers and prohibits policies and practices that may be retaliatory or discourage reporting by employees of injuries and illnesses. Employers are now required to electronically submit previously recorded data on an annual basis. The reported data will be made available on a public website with personal information redacted. The final rule requires employers to inform employees of their right to report injuries and illnesses. OSHA’s inclusion of anti-retaliatory provisions is driven by the Agency’s belief that some safety-performance based incentive programs may be perceived as discouraging or even disciplining employees for reporting injuries and illnesses. The preamble to the final rule also addresses post-incident drug testing programs that mandate testing for any incident that requires medical treatment. OSHA provides post-incident drug testing requires a reasonable possibility that drug-induced impairment by the reporting employee was a contributing factor to the injury. The final rule provides little detail as to drug testing and safety incentive program characteristics that would be compliant. Industry safety and health professionals are working to determine whether current programs will require changes to be compliant with the new regulations. In July, EEI and affiliated groups met with OSHA senior staff to discuss industry concerns. OSHA acknowledged the vagueness of the rule and subsequently delayed enforcement of the anti-retaliation provisions until November 1, 2016. OSHA intends to develop compliance guidance documents prior to that date, and is receptive to receiving input from EEI. EEI staff is currently engaged with member companies to develop sample language for OSHA’s consideration. Concurrently, EEI continues to work with OSHA staff to facilitate inclusion of industry concerns in the forthcoming compliance guidance. Robocall Decision EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Telephone Consumer Protection Act Victory The Federal Communications Commission (FCC) recently voted unanimously in favor of granting an EEI petition to allow companies to use automated calls and text messages to provide timely service-related information to customers. The vote removes a significant regulatory barrier and allows electric companies to provide customers with important and timely information about their electricity service. Veterans in Energy EEI Fall Board and Chief Executives Meeting – September 6-8, 2016 Purpose Veterans in Energy is a new national professional society providing transition, retention and professional development support to the growing number of military veterans working in the energy industry. These men and women represent a mix of energy jobs in all areas of energy—renewable and traditional generation, nuclear, research, supply, transmission and distribution. The energy industry has a long history of employing military veterans because they have the training and skills that match those required for technical, engineering, support and leadership positions in energy companies. Background Veterans in Energy builds upon the success of Troops to Energy Jobs, an initiative launched in 2010 by the Edison Electric Institute under the leadership of then-Chairman Tom Farrell. Managed by the Center for Energy Workforce Development, the initiative’s mission is to help military veterans find careers in the electric and natural gas industries. More than 35 energy companies across the country have implemented best practices and seen the benefits of Troops to Energy Jobs. One of the many best practices identified by Troops to Energy Jobs is the creation of Veteran Employee Resource Groups to help companies support the needs of employees who are military veterans. Veterans in Energy expands on this best practice by connecting military veteran employees to others around the country and by providing leadership opportunities at the state, regional and national levels. Part of a public-private partnership announced by DOE Secretary Ernest Moniz in 2015, Veterans in Energy is a joint effort by the U.S. Departments of Energy, Labor, Defense and Veterans Affairs; the Center for Energy Workforce Development and the policy groups that partner with the Center including Nuclear Energy Institute, Edison Electric Institute, the National Rural Electric Cooperative Association, the American Public Power Association and the American Gas Association; and labor unions including the International Brotherhood of Electrical Workers and the Utility Workers Union of America. 2016 National Leadership Summit Veterans in Energy will hold its inaugural meeting, the 2016 National Leadership Summit on October 13-14 at the Capital Hilton, Washington, D.C. The National Leadership Summit will feature leaders from both the energy industry and federal government. These speakers will explore the work being done around the country to support transitions from military to civilian life and discuss how veterans can have strong, successful careers in energy. Energy company sponsors should identify up to three employees to attend the summit. They should all be veterans and should have an interest in helping grow this new organization that is specifically created to meet the needs of dedicated military veteran employees. For more information on the National Leadership Summit, go to www.veteransinenergy.org or contact Jonathan Breed at jzb@nei.org. For more information on Troops to Energy Jobs, go to www.cewd.org or contact Ann Randazzo at ann@cewd.org. SPP CEO Meeting EEI 2016 Board and Chief Executives Meeting – September 6-8, 2016 Sean Trauschke, Chairman, President and CEO of OGE Energy Corp, will chair this biannual meeting with Nick Brown, President and CEO of Southwest Power Pool. The meeting will provide updates and an opportunity for discussion on some current issues facing the SPP region, including: (i) The Value of Transmission Study; (ii) Compliance activities; and (iii) Implementation of the Attachment Z2 revenue crediting process. EEI urges all CEOs and executive leaders with interest in the SPP region to join this meeting. 2016 Fall Board and Chief Executives Meeting SPP CEO Meeting Wednesday, September 7 ● 4:30-5:30 P.M. Regular Meeting Welcome and Introductions Sean Trauschke, Chairman, President and CEO, OGE Energy Corp. SPP Update Nick Brown, President and CEO, Southwest Power Pool I. Transmission The SPP Value of Transmission Study II. Compliance  Market Monitoring Issues o FERC Audit  CIP V3 Audit  FERC Order No. 693 Audit III. Z2 Revenue Crediting Process IV. Other Key Issues Action Items/Next Steps The Broadmoor  Colorado Springs, CO PJM CEO Meeting EEI 2016 Board and Chief Executives Meeting – September 6-8, 2016 Ralph Izzo, Chairman, President and CEO of PSEG will chair this biannual meeting with Andy Ott, President and CEO of PJM. The meeting will provide an opportunity for update and discussion on some of the most pressing issues facing the PJM region including: (i) transmission planning and Order 1000 lessons learned; (ii) emerging market issues including resource investment in competitive markets and seasonal capacity performance; and (iii) compliance studies with regard to the EPA’s Clean Power Plan. EEI urges all CEOs and executive leaders with interest in the PJM region to join this meeting. 2016 Fall Board and Chief Executives Meeting PJM CEO Meeting Thursday, September 8, 2016 7:00 – 8:30 am The Broadmoor Regular Meeting: 7:00 – 8:30 am I. Welcome and Introductions Ralph Izzo, Chairman, President and CEO, PSEG II. PJM Update Andy Ott, President and CEO, PJM A. Update and Trends B. Transmission Planning  Order No. 1000 Competitive Process Improvements  Asset Management/Transmission Replacement C. Market Issues  Resource Investment in Competitive Markets  Capacity Performance o Seasonal Capacity Resources  Price Formation D. EPA Clean Power Plan  Compliance Modeling E. Other Issues III. Action Items/Next Steps  Colorado Springs, CO  West Ballroom C/D September 8, 2016 7:30 – 8:30 am West Ballroom A/B, The Broadmoor Colorado Springs, CO IEI Management Committee Meeting Thursday, September 8, 2016 7:30 – 8:30 am Breakfast available starting at 7:15 West Ballroom A/B The Broadmoor Colorado Springs, CO Agenda IEI Co-Chairs Scott Prochazka, President and CEO, CenterPoint Energy Bob Rowe, President and CEO, NorthWestern Energy Attendees IEI Management Committee Discussion Through a series of activities in 2016, IEI has developed significant insights into the changing electric power industry and the key role of electric companies in putting technology to work to advance the power grid and to meet customer needs. (Note: summary of IEI major activities, key takeaways, and what’s next will be provided to Management Committee week of August 29.) This meeting is an opportunity for the Management Committee to discuss and refine IEI’s focus areas for 2017 and next steps. For more information, and to RSVP, please contact Cristina Rago at 202.508.5440 or crago@edisonfoundation.net. Edison Electric Business Session Edison Electric Institute Minutes of the Board of Directors June 13-14, 2016 DRAFT: August 16, 2016 A regular meeting of the Board of Directors of the Edison Electric Institute (EEI) was held at the Sheraton Grand Hotel, Chicago, IL on June 13, 2016. Mr. Nicholas Akins, EEI Chairman, and Chairman, President & CEO of American Electric Power (AEP), presiding. Directors Present Nicholas Akins, Chairman Thomas Fanning, Vice Chairman Christopher Crane, Vice Chairman Patricia Vincent-Collawn, Vice Chairman Antony Earley, Chairman Emeritus Darrel Anderson Gerard Anderson Terry Bassham Warren Baxter Stephen Bird for Gregory Abel Gregory Butler for James Judge Don Clevenger for John Young Theodore Craver Lisa Crutchfield for Robert Schoenberger Bernerd Da Santos for Andres Gluski Thomas Dunn Paul Farr Thomas Farrell Margaret Felts Haley Fisackerly for Leo Denault Alan Hodnik David Hutchens Ralph Izzo Jon Jipping for Joseph Welch Chris Kelly for John Bruckner Gale Klappa Kent Larson for Benjamin Fowke Constance Lau James Laurito Kevin Marsh John McAvoy Scott Morris Darren Olagues James Piro Scott Prochazka Richard Riazzi Alan Richardson Michael Rowe Robert Rowe Mark Ruelle Rick Schach for Carl Chapman Mark Schiavoni for Donald Brandt Eric Silagy for James Robo Violet Sistovaris Jay Skabo for Nicole Kivisto William Spence Paul Thessen James Torgerson Sean Trauschke William Whale for John Ramil Geisha Williams Gary Wolter Lloyd Yates for Lynn Good Kenneth Zagzebski Others Helen Burt Marvin Fertel Michael Howard Allen Leverett Robert Powers EEI Officers Present Thomas Kuhn David Owens Brian Wolff Philip Moeller Edward Comer Emily Fisher Lawrence Jones Richard McMahon Mary Miller Phillip Moeller James Owen John Schlenker Quinlan Shea 1. Mr. Akins called the Board meeting to order at 3:20 p.m. He called attention to the Antitrust Guidelines and the Director Conflict of Interest Policy. 2. He thanked Mr. John Ramil, President & CEO of TECO Energy for his service to the industry in expectation of his retirement following completion of the merger with Emera. 3. Mr. Akins outlined that the afternoon discussion will focus on three industry priority policy goals related to the industry vision for 2030; Grid Modernization, Clean Energy and Customer Solutions. 4. Mr. David Owens, Executive Vice President, Business Operations Group & Regulatory Affairs Operations, initiated the grid modernization discussion by reviewing the wide range of states and institutions looking at the future of the grid. Mr. John McAvoy, Chairman & CEO of Consolidated Edison, indicated that the New York REV required companies to provide a transparent planning document, using a cost benefit analysis covering distributed and grid based options this summer, in order to allow others to propose options. He noted that distribution utilities are unable to own generating options or behind the meter services unless no one else wants to offer them. He further stated that recent NYPSC decisions indicate that utility services will continue to be regulated largely on a cost of service basis. Ms. Helen Burt, Senior Vice President, External Affairs & Public Policy of Pacific Gas and Electric, reported that the California PUC is questioning cost of service ratemaking and has yet to decide the process and structure it will apply. Mr. Theodore Craver, Chairman & CEO of Edison International, indicated that a distributed energy resource proceeding before the California PUC proposes a different regulatory model when distribution resources are avoided or deferred. He agreed that the PUC seeks greater transparency in and wants a more collaborative planning process. Mr. Michael Howard, President & CEO of EPRI, reported that the EPRI summer seminar would address grid modernization, including the integration and dynamic power issues, analytics, customer engagement and related issues. 5. Mr. Gerard Anderson, Chairman & CEO of DTE Energy, lead the discussion of environmental matters. He recognized Mr. John McManus, Vice President, Environmental Services of AEP for his leadership of the Environmental EAC and reported that Mr. Chuck Barlow, Vice President, Environmental Policy and Strategy of Entergy, would become the new Chair of that EAC. He reported that the DC Circuit oral argument about the 2 6. 7. 8. 9. 10. 11. 12. 13. Clean Power Plan (CPP) has been delayed until late September, so that it could take up to a year and a half to get a final decision from the Supreme Court. Meanwhile, EPA continues to clarify the incentive and trading plans and proposed methane emissions control rules. A few states are proceeding with GHG plans including Washington, Minnesota and the RGGI states. EIA projects an additional 55 GW of coal plant retirements above the 80 GW already retired. He reported on developments implementing the Paris agreement, and that it is likely to enter into force in 2017-18. Mr. Anderson next addressed coal divestment initiatives, noting that the California Insurance Commissioner includes electric utilities in this divestment pool. He also indicated that the SEC is taking comments on updating its sustainability disclosure requirements as is the Sustainability Accountability Standards Board. All these fail to recognize the steps utilities are taking to reduce GHG emissions. Mr. Richard McMahon, Vice President, Energy Supply & Finance of EEI, introduced three members of the Wall Street Advisory Group: Casey Hermann, PWC, Karen Choi, Capital Resources, and John Lang, Barclays to discuss environmental disclosure issues. Mr. Hermann indicated that investors are beginning to take GHG risks into account and that GHG data is more important to the growing share of millennial investors, which may affect the SEC’s determination of whether such information is material to investors. He urged industry members to tell their story on carbon reductions. Ms. Choi and Mr. Lang also indicated there is growing investor interest in environmental issues, especially involving climate change, and this is affecting disclosure and risk assessment discussions. The panel of investors and financial stakeholders strongly encouraged the industry to work to enhance its considerable sustainability ESG disclosures. Ms. Constance Lau, President & CEO of Hawaiian Electric, reported how these issues are affecting non-utility investment committees, especially at colleges. Mr. Anderson and Mr. Akins stressed the importance of members shaping the debate by emphasizing the positive environmental impacts of the changes they are initiating. Mr. Christopher Crane, President & CEO of Exelon, discussed the importance of addressing the problems in the competitive market design rules undermining nuclear and base load plant operations, thus harming GHG emissions and causing price spikes. He indicated that Mr. Phillip Moeller, Senior Vice President, Energy Delivery & Chief Customer Solutions Officer, will be leading an internal task force to devise more realistic market redesign. Mr. Ralph Izzo, Chairman, President & CEO of Public Service Enterprise Group, discussed customer opportunities. He reported that EEI has put together a catalogue of utilities working on customer solutions, which has identified a range of policies that impede utility investment in customer energy management solutions. Mr. Terry Bassham, Chairman, President & CEO of Great Plains Energy, and Mr. Thomas Fanning, Chairman, President & CEO of Southern, noted that it is important for the industry to take the lead to be part of these market solutions. Mr. Moeller and Mr. Owens reported on EEI’s customer outreach efforts with commercial and industrial customers, federal agencies, and other customers looking for clean solutions. They discussed efforts to obtain customer advocacy support as well. Mr. Owens asked members to step up efforts to build electric vehicle charging stations/infrastructure. Mr. Scott Morris, Chairman, President & CEO of Avista, discussed state rules allowing EV investments. Mr. Thomas Kuhn, President of EEI, announced that Edward Comer, Vice President, General Counsel & Corporate Secretary of EEI, will retire at the end of the year and asked the Board to promote Ms. Emily Fisher to Vice President, Legal. The Board approved the motion. Ms. Fisher was congratulated. Mr. Akins recessed the meeting at 5:00 p.m. Mr. Akins called the second session of the Board meeting to order at 3:00 p.m. on June 14. He reported on CEO changes: Mr. James Judge has succeeded Mr. Thomas May at Eversource Energy; Ms. Patricia Poppe has succeeded Mr. John Russell at CMS Energy; Mr. Darren Olagues has succeeded Mr. Bruce Williamson at Cleco; Mr. Allen Leverett has succeeded Mr. Gale Klappa at WEC Energy Group. 3 14. Mr. Akins referred to the antitrust guidelines and availability of EEI’s financial information. The minutes of the prior Board meeting were approved. 15. Mr. Fanning gave the membership report and noted that the overall dues level will not increase in the next year. He reported that EEI had received a clean Audit Report and that the Executive Committee had discussions with EEI’s lead auditor. The Treasurer’s Report and the Membership and Budget Report were approved. 16. Mr. Kuhn reflected on feedback about the convention and member implementation of EEI’s strategic policy initiatives. He also provided an update on distributed generation policy developments, with Mr. Eric Silagy, President & CEO of Florida Power & Light, describing the solar initiative in Florida. 17. Mr. Comer and Mr. Moeller discussed the June 21 Federal Trade Commission (FTC) workshop on distributed solar and consumer protection issues and NARUC’s activities addressing net metering and other rate making policy changes. 18. Mr. William Spence, Chairman, President & CEO of PPL, introduced the discussion on business continuity. Mr. Fanning noted that the Electricity Subsector Coordinating Committee (ESCC) continues to be held in high regard throughout the government and has been involved in follow-up discussions regarding several terrorist actions. Mr. Fanning reported that he is representing the industry on the Homeland Security Advisory Task Force, and is initiating working relationships with senior officers from the telecom and financial sectors. 19. Mr. Robert Powers, Chief Operating Officer of AEP, reported on progress developing the Cyber Mutual Assistance Project in the event of a major security incident. He alerted the Board that EEI will be asking each member to appoint a Cyber Mutual Assistance Coordinator to lead response and recovery in the event of a cyber incident. Mr. Powers also discussed the scheduling of a cyber mutual assistance exercise in the fall. Mr. Kuhn elaborated on these matters. 20. Mr. Spence discussed ES-ISAC transformation efforts as set forth in supporting materials, including improving usefulness of the web portal to users. He urged member companies to support NERC’s proposal to add $1 million to its budget for needed improvements to the ES-ISAC. 21. Mr. James Torgerson, Chief Executive Officer of AVANGRID, reported on the EEI Executive Unmanned Aerial Systems (UAS) Task Force, which will be chaired by Mr. Silagy, to advise the Board on unmanned drones and related matters. Mr. Torgerson urged members to nominate participants in this Task Force and reported on how EEI and its partnership are working to obtain approval for drone use beyond lines of sight. Mr. Silagy summarized activities taking place in Congress and at the FAA to obtain greater flexibility in drone use. He explained the benefits of drone use in many circumstances, including daily storm response, and some of the difficulties caused by existing regulations. Mr. Akins thanked Mr. Spence and his team members for their leadership on all business continuity efforts. 22. Mr. Akins provided an update on National Response Event (NRE) activities, noting that Mr. Greg Billow, Entergy, will be taking over leadership of the NRE process. He explained that RAMP-UP, a resource allocation tool developed for NRE purposes, is increasingly being used by the regional response groups as well. 23. Mr. Moeller reported that EEI is increasing outreach to FERC staff to keep the right people informed of industry efforts in the planning and response arena. 24. Mr. Akins announced the following storm recovery awards: The Emergency Recovery Award was presented to eight companies: Avista Corporation, for recovery from hurricane-force winds in November (the worst storm in their history); Duke Energy, recovering from ice and snow with Winter Storm Jonas in January; Florida Power & Light, for their response to severe weather in January; Hydro One of Canada, for a winds and ice storm on December 24th last year; National Grid for a February snow storm; Oklahoma Gas & Electric, for their response to a half-inch of ice over Thanksgiving weekend, and then snow, ice, and flooding over New Year’s; PECO, for their response to thunderstorms last June; and Xcel Energy, hit with snow in their Texas 4 territory from Winter Storm Goliath in December. The Emergency Assistance Award was also provided to three companies: Indianapolis Power and Light; Kansas City Power and Light; and National Grid. All three companies assisted others recovering from winter storms. 25. Mr. Lloyd Yates, Executive Vice President Market Solutions & President, Carolinas Region of Duke Energy, reported on developments in North Carolina regarding disposal of coal ash. 26. Mr. Akins introduced Mr. Lonnie Stevenson, International President of the IBEW, and described some elements of the industry’s partnership with labor. Mr. Stephenson focused on stopping the premature closure of nuclear units as bad news for consumers, the economy and the environment. He urged continued coordination between labor and the utility industry to provide unified solutions. He also discussed the importance of training the next generation entering our industry workforce. He expressed a strong commitment to bi-partisan efforts to solve the nuclear and other energy issues and urged passage of the bipartisan Senate energy bill because of its commitment to training, fuel diversity and the need to take the lead on our energy future. He discussed the IBEW Code of Excellence as a commitment to provide the best service to customers, promote safety and respect employees and urged cooperation to do what is right for the industry and our customers. EEI ANNUAL MEETING 1. Mr. Akins convened the Annual Meeting at 4:25 p.m. The members unanimously elected the proposed members of the Board. (Tab A in Board Book). Mr. Anthony Earley, Chairman, President & CEO of PG&E, recommended and the Board unanimously approved election of the Board leadership and EEI Officers (Tab B). Mr. Akins reflected on his experience as Chairman of EEI and comments past Chairs had made at a recent ex-Chair get-together and thanked the members and EEI staff for all their support. He then turned over the Chair to newly elected Chairman, Mr. Fanning. 2. Mr. Fanning congratulated all his colleagues and expressed many kind words about Mr. Akins ability, personality and leadership for AEP and the industry, as an “engineer with personality.” 3. Mr. Fanning proposed new Executive Committee Appointments (Tab C) and Policy Committee leadership (Tab D) which were unanimously approved. 4. Ms. Shannon Bañaga, TECO Energy, provided the Power Pac report. 5. The Directors of the Edison Foundation (Tab E) and the Center for Energy Work Development (Tab F) were approved. 6. The resolution thanking Mr. Akins for his work as EEI Chairman was approved. 7. A presentation of gifts followed. Mr. Akins expressed his thanks and appreciation. 8. The meeting was adjourned at 5:00 p.m. 5 Treasurer’s Report EEI Board and Chief Executives Meeting, September 2016 The 2016 regular activities budget reflects total revenue and gross operating expense of $69.1 million. As of August 15, 2016, actual year to date net operating income is slightly better than budget, primarily due to an increase in non-dues revenue from meetings, sponsorships and international affiliates. Attached is the most current 2016 Statement of Operations for EEI’s Regular Activities. The Separately Funded Activities budget, which is primarily supported by member companies on a voluntary basis, amounts to approximately $12.6 million for 2016. Attached is the 2016 Statement of Expenses for Separately Funded Activities. The audits of the Institute’s Retirement Income Plan and Cooperative Savings Plan, for the year ended December 31, 2015, are currently in progress and are on schedule to be completed later this summer. The financial statements for both plans are prepared in compliance with the Department of Labor’s requirements and in accordance with the Employee Retirement Income Security Act of 1974. Commencing January 1, 2017, the hard freeze of EEI’s Retirement Income Plan will go into effect. As always, copies of the Institute’s 2015 audited financial statements and IRS Form 990, which were presented by CliftonLarsonAllen at the June, 2016 Executive Committee Meeting, are available upon request. Edison Electric Institute Regular Activities Statement of Operations - Unaudited 2016 Budget As of August 15, 2016 Budget Actual Revenues: Investor-owned electric utilities dues Programs, publications and meetings Investment income International affiliates dues Associate members dues Strategic partner Total dues and revenues $ 53,994,000 9,064,000 2,900,000 1,150,000 1,500,000 500,000 69,108,000 $ 53,994,000 5,144,000 1,800,000 719,000 937,000 500,000 63,094,000 $ 54,069,000 5,755,000 1,802,000 801,000 905,000 500,000 63,832,000 Expenses: Salaries Employee benefits Programs, publications and meetings General office and administrative Total expenses 28,134,000 12,206,000 18,704,000 10,064,000 69,108,000 17,584,000 7,629,000 11,641,000 6,290,000 43,144,000 17,489,000 8,175,000 11,559,000 6,301,000 43,524,000 - $ 19,950,000 $ 20,308,000 Net Operating Income $ Edison Electric Institute Separately Funded Activities Statement of Expenses - Unaudited 2016 Budget Fund Description Industry Issues (2) $ Employment Testing 8,357,000 As of August 15, 2016 Budget Actual (1) $ 5,223,000 $ 6,704,000 2,028,000 1,267,000 1,132,000 Restoration, Operations & Crisis Management 600,000 393,000 420,000 Energy and Wildlife Action Coalition 537,000 336,000 430,000 Spare Transformer 313,000 196,000 158,000 Water Advocacy Coalition 280,000 175,000 68,000 Environment 250,000 156,000 75,000 AVIAN Power Line 208,000 130,000 121,000 Total SFA Expense, net of U-Groups $ 12,573,000 $ 7,876,000 $ 9,108,000 Funds not controlled by EEI Utility Air Regulatory Group 7,620,000 4,763,000 4,919,000 Utility Solid Waste Activities Group 3,629,000 2,268,000 2,215,000 Notes: (1) All SFA budgets are estimates and are subject to available funds contributed on a voluntary basis. (2) The EEI Board approved a 10% voluntary assessment (based on dues) for the Industry Issues SFA. EEI Membership Report September 2016 A) US Electric Company Membership 1) We are very pleased to report that San Diego Gas & Electric has agreed to rejoin EEI. SDG&E is a regulated public utility founded in 1881 that provides energy service to 3.6 million people through 1.4 million electric meters and 873,000 natural gas meters in a service territory of 4,100 square miles in San Diego and southern Orange counties. SDG&E employs about 5,000 people, and is a subsidiary of Sempra Energy, a San Diego-based Fortune 500 energy services holding company whose subsidiaries provide electricity, natural gas and value-added products and services. B) International Membership 1) APR Energy has applied to become an International member. APR Energy is a global leader in the market for rapidly deployable, large-scale power, and is the world’s leading provider of fast-track mobile turbine power. The company delivers flexible, turnkey power plants of 1 to 300 MW, operational in 60 to 90 days. The company has installed over 3 GW of generation capacity (mobile gas turbines or diesel power modules) over the past 10 years, in temporary or semi-permanent facilities, primarily in Africa and the Middle East. With this addition, EEI will have 60 International Members with annual dues revenue of approximately $1.2 million. C) Associate Membership 1) POWER Membership – Ernst & Young has renewed their yearly Power Membership for $40,000. Thus far, the Power Membership program has a 100% retention rate. EEI currently has 13 companies in the Power Membership program: Aclara, Ernst & Young, Leidos Engineering, Mitsubishi Electric Power Products, Nest Labs, Pike Corporation, Regulated Capital Consultants, Troutman Sanders, and Utilities International. Power-Plus Members include GE Power, Navigant, Oracle, and SunPower. 2) Regular Associate Membership – 3 Applications COMPANY a) Exponent, Inc. Hugo Van Nispen Principal Warrenville, IL BUSINESS Engineering and economic management consulting b) Unify Energy Solutions, LLC Anna King Marketing Director Houston, TX Energy management solutions Membership Report September 2016 Page Two COMPANY c) Unipart Expert Practices Gary Tharme Senior Vice President Montvale, NJ BUSINESS Performance Excellence Consulting These additions are partially offset by 8 Associate Members that have dropped their EEI Membership for various reasons: Esri, Inc., Kleinfelder, Inc., McCarter & English, LLP, Radian Research, Inc., Sepcon, Inc., Tecnicas Reunidas, S.A., TEKsystems, and Valmont Industries, Inc. With these changes, EEI will have 259 Associate Members (including thirteen Power Associate members) with annual dues revenue of approximately $1.5 million. EEI Board of Directors AES Corporation ALLETE Alliant Energy Corporation Ameren Corporation American Electric Power American Transmission Company AVANGRID Avista Corporation Berkshire Hathaway Energy Black Hills Corporation CenterPoint Energy Central Hudson Gas & Electric Corporation Cleco Corporate Holdings CMS Energy Corporation Consolidated Edison Cross Texas Transmission Dominion DTE Energy Company Duke Energy Duquesne Light Company Edison International El Paso Electric Company Emera Maine Empire District Electric Company Energy Future Holdings Corporation Entergy Corporation Eversource Energy Exelon Corporation FirstEnergy Corporation Florida Public Utilities Great Plains Energy Green Mountain Power Corporation Hawaiian Electric Industries IDACORP InfraREIT ITC Holdings Corporation Liberty Utilities MGE Energy Montana-Dakota Utilities Company Mt Carmel Public Utility Company National Grid NextEra Energy NiSource NorthWestern Energy OGE Energy Corporation Ohio Valley Electric Corporation Otter Tail Corporation PG&E Corporation Pinnacle West Capital Corporation PNM Resources Current Members New Members Mr. Andres R. Gluski Mr. Alan R. Hodnik Ms. Patricia Leonard Kampling Mr. Warner L. Baxter Mr. Nicholas K. Akins Mr. Michael Rowe Mr. James P. Torgerson Mr. Scott L. Morris Mr. Gregory E. Abel Mr. David R. Emery Mr. Scott M. Prochazka Mr. James P. Laurito Mr. Darren J. Olagues Ms. Patricia K. Poppe Mr. John J. McAvoy Mr. Paul Thessen Mr. Thomas F. Farrell Mr. Gerard M. Anderson Ms. Lynn J. Good Mr. Richard Riazzi Mr. Theodore F. Craver Mr. Pedro J. Pizarro (Effective October 1) Ms. Mary E. Kipp Mr. Alan Richardson Mr. Bradley P. Beecher Mr. John F. Young Mr. Leo P. Denault Mr. James J. Judge Mr. Christopher M. Crane Mr. Charles E. Jones Mr. Jeff M. Householder Mr. Terry D. Bassham Ms. Mary G. Powell Ms. Constance H. Lau Mr. Darrel T. Anderson Mr. David A. Campbell Mr. Joseph L. Welch Mr. Ian Robertson Mr. Gary J. Wolter Ms. Nicole A. Kivisto Ms. Margaret E. Felts Mr. John Bruckner Mr. James L. Robo Ms. Violet G. Sistovaris Mr. Robert C. Rowe Mr. R. Sean Trauschke Mr. Nicholas K. Akins Mr. Charles S. MacFarlane Ms. Geisha J. Williams Mr. Donald E. Brandt Ms. Patricia K. Vincent-Collawn EEI Board of Directors Portland General Electric PPL Corporation Public Service Enterprise Group Puget Sound Energy San Diego Gas & Electric Company SCANA Corporation Southern Company Talen Energy TECO Energy UGI Corporation Unitil Corporation UNS Energy Corporation Upper Peninsula Power Company Vectren Corporation Vermont Electric Power Company WEC Energy Group Westar Energy Xcel Energy Current Members New Members Mr. James J. Piro Mr. William H. Spence Mr. Ralph Izzo Ms. Kimberly J. Harris Mr. Jeffrey Martin Mr. Kevin B. Marsh Mr. Thomas A. Fanning Mr. Paul A. Farr Mr. John B. Ramil Mr. Robert F. Beard Mr. Robert G. Schoenberger Mr. David G. Hutchens Ms. Barbara Siehr Mr. Carl L. Chapman Mr. Thomas Dunn Mr. Allen L. Leverett Mr. Mark A. Ruelle Mr. Benjamin G.S. Fowke Mr. Chris Huskilson Edison Electric Institute Board of Directors Report EEI September 2016 Colorado Springs, CO POWGFPAC Authorization for Solicitation for Member Company Representatives By signing an Authorization for Solicitation form, you acknowledge that you are authorizing, and have the power to authorize, the PowerPAC to solicit you and executives of your company. You may not grant permission to solicit to any other trade association during the same calendar year. By Signing an Authorization Form, the PowerPAC may contact your designated Washington Representative regarding the PAC. And, the PowerPAC may solicit all of the executives in your company or only those you designate. EEI will not directly solicit any executives of your company without contacting you first for guidance. The Federal Election Commission (FEC) requires EEI to have a current Authorization for Solicitation Form on file for each member company to further discuss the importance of the PowerPAC. For questions or assistance, please call Taylor Beis at (202) 508-5588 or submit online at www.EEI.org/PowerPAC. 1 Table of Contents Authorization for Solicitation Form ................................................... 3 Treasurer’s Report .................................................................................... 4 Steering Committee ................................................................................... 5 2016 Individual Contributions .............................................................. 6 2016 PAC to PAC Contributions......................................................... 11 2016 Election Cycle Disbursements ................................................ 12 2 EEI PowerPAC Authorization for Solicitation Form SAMPLE SAMPLE EEI PowerPAC Authorization for Solicitation Form Name/Title Company YES. I want to be an active participant in to help build political POWER for the electric utility industry. I authorize to solicit me as an executive of my corporation. which is a member of the Edison Electric Institute. This to solrcn has not and Will not be granted to any other trade association during this or any other calendar year indicated below. may also contact my deSignated Washington Representative regarding Po'v'v?er PAC. Designated Washington Rep YES. may solicit all of the executives in my company. I understand that EEI Will not directly solicit executives of my company without contacting me first for guidance. Cl YES. may solicn the followmg executives in my company. I understand that EEI Will not directly solicit executives of my company withOut contacting me first for guidance. I have already signed an Authorization to Solicit form for another trade assooation. Please contact our subSidiary company for authorization. Subsidiary Company Contact ?2er Guru: Em? hi"- sowusw'. smut-V . axis-J. .: whom?; runner]; mat .3 mm a" 'u guilt . {mm .1 gym?! 1 :Huuru? m; saw '17! another .?nsac axis-chain Authorized for 2016 Authorized for 2018 Signature: Signature: Date: 0016 Date: /2018 Authorized for 2017 Authorized for 2019 Signature: Signature: Date: r2017 Date: /2019 Please complete, sign and tax to: PowerPAC of the Edison Electric Institute IFAX I (202) 508-5573 or submit online at m.EEI.oro/PowerPAC For questions or assistance, please call Taylor Bels at (202) 508-5588 Paid tor by PowerPAC ot the Edison Electric Institute. Contributions to PowerPAc cannot be deducted as a charitable contnoution tor federal tax ourooses. federal law requires us to use our best e?ons to collect and report the name. mailing address. occupation and the name at the emoloyer ot riarvmuals whose contributions exceed $200 per calendar year. Contributions to PowerPAc are tor political ouposes only. Contributions are voluntary and you have a right to retuse to commute mtmut reprisai regulations allow a company to Sign only one trade association PAC Authorization to Solicn form per calendar year. SAMPLE SAMPLE September 2016 Treasurer’s Report 2016 Election Cycle: 1/01/2015 – 9/2/2016 Receipts - Contributions to the PowerPAC CEO and Member Company Executive $324,100 PAC to PAC $243,000 EEI Employee $122,192 Washington Representatives $39,200 Total Election Cycle Receipts $728,492 Disbursements Contributions to Candidates $391,500 Other Contributions $304,500 Total Election Cycle Disbursements $696,000 Summary Year End 2015 Cash on Hand $86,067 September 2,2016 Cash on Hand $87,429 4 2016 PowerPAC Steering Committee Nelson Perez Taylor Beis National Grid Chairman Edison Electric Institute Treasurer, PowerPAC Terri Oliva David Arthur PPL Corporation Edison Electric Institute Shannon Maher Bañaga Steve Plevniak TECO Energy Xcel Energy David Bridges John Rainbolt Edison Electric Institute Alliant Energy Donise Cameron Mike Sewell Public Service Enterprise Group Duke Energy Whitney Drew Lorna Wisham Orr NextEra Energy FirstEnergy Jessica Hogle PG&E Jeanne Wolak Southern Company Mark Miller AES Corporation 5 2016 Individual Contributions The following individuals have contributed or made a commitment up to $5,000 to the PowerPAC since January 1, 2016 Name Company Greg Abel Nick Akins Gerry Anderson Warner Baxter Don Brandt Carl Chapman David Christian Christopher Crane Ted Craver Leo Denault Tony Earley, Jr. Tom Fanning Tom Farrell Paul Farr Ben Fowke Andres Gluski Lynn Good Charles Jones Tom Kuhn Connie Lau Philip Moeller David Owens Scott Prochazka Jim Robo Quin Shea Bill Spence John Thorndike Pat Vincent-Collawn Geisha Williams Brian Wolff Michael Yackira Berkshire Hathaway Energy American Electric Power DTE Energy Ameren Services Pinnacle West Capital Corp Vectren Corporation Dominion Exelon Corporation Edison International Entergy Corporation PG&E Corporation Southern Company Dominion Talen Energy Xcel Energy AES Corporation Duke Energy FirstEnergy Corporation Edison Electric Institute Hawaiian Electric Industries, Inc. Edison Electric Institute Edison Electric Institute CenterPoint Energy, Inc. NextEra Energy, Inc. Edison Electric Institute PPL Corporation Moelis & Company PNM Resources, Inc. Pacific Gas & Electric Company Edison Electric Institute 6 2016 Individual Contributions The following participants have contributed or made a commitment of at least $2,000 to the PowerPAC since January 1, 2016 Name Company Scott Aaronson Terry Bassham Todd Black Helen Burt Ed Comer Eric Grey Al Hodnik Ralph Izzo Lawrence Jones Patricia Kampling Andrea Kelly Paul Koonce John McAvoy Brian McCormack Richard McMahon Mary Miller Scott Morris Mark Planning John Ramil Mark Ruelle John Schlenker Bob Schoenberger Kathy Steckelberg Rick Tempchin Sean Trauschke Edison Electric Institute Great Plains Energy, Inc. Unitil Corporation Pacific Gas and Electric Company Edison Electric Institute Edison Electric Institute ALLETE Public Service Enterprise Group Edison Electric Institute Alliant Energy Corporation Berkshire Hathaway Energy Dominion Consolidated Edison, Inc. Edison Electric Institute Edison Electric Institute Edison Electric Institute Avista Corporation Edison Electric Institute TECO Energy, Inc. Westar Energy Edison Electric Institute Unitil Corporation Edison Electric Institute Edison Electric Institute OGE Energy Corporation 7 2016 Individual Contributions The following participants have contributed or made a commitment of at least $1,000 to the PowerPAC since January 1, 2016 Name Company Robbie Aiken David Arthur George Baker Taylor Beis David Bridges David Brown Alicia Cannon Kwame Canty Christopher Chapel Shawn Cooper Alex DeBoissiere Emily Fisher Mary Randolph Gannon David Gilbert Kimberly Greene Robert Grey Robert Hall Mat Hastings Chris Hickling Eric Holdsworth David Hutchens Tony Ingram Anthony Kavanagh James Laurito Melissa Lavinson Ron Litzinger Cal Odom Jim Owen Jim Piro Pedro Pizarro Joseph Power Frances Resheske Bob Rowe Mark Schiavoni Ronald Talbot Jim Torgerson William Von Hoene Stephanie Voyda Pinnacle West Capital Corp PPL Corporation Williams & Jensen Edison Electric Institute Edison Electric Institute Exelon Corporation American Electric Power Edison Electric Institute NextEra Energy, Inc. PG&E Corporation UIL Holdings Corporation Edison Electric Institute Edison Electric Institute Exelon Corporation Southern Company PPL Corporation Entergy Corporation Edison Electric Institute Edison Electric Institute Edison Electric Institute UNS Corporation Edison Electric Institute American Electric Power Central Hudson Gas & Electric Corp PG&E Corporation Southern California Edison Co Edison Electric Institute Edison Electric Institute Portland General Electric Southern California Edison Ameren Corporation Consolidated Edison Inc. NorthWestern Energy Arizona Public Service Co PNM Resources AVANGRID, Inc. Exelon Corporation Edison Electric Institute 8 2016 Individual Contributions The following participants have contributed or made a commitment up to $1,000 to the PowerPAC since January 1, 2016 Name Company Anthony Alexander Jr. Bob Bartlett Shannon Maher Bañaga Ann Becker Ray Billups Dale Bodden Jeff Bonham Tracy Bridge Summer Bravo Donise Cameron Kelly Chapman Ron Christian Mark Collin Kristie Colvin Denise Danner Darnell DeMasters Stacy Derstine Patrick Dinkel Scott Doyle Martin Doern Whitney Drew Greg Dudkin Emily Duncan Donna Easterly Mike Eckard Bruce Edelston Valentine Emesih David Falck Daniel Froetscher Shaun Garrison Paul Gastineau Barbara Gomez Allison Graves Steven Greenley Jeff Guldner David Hansen Susan Hardwick James Hatfield John Hatfield Gary Hayes Jessica Hogle FirstEnergy Corporation Alliant Energy Corporation TECO Energy Arizona Public Service Co CenterPoint Energy, Inc. CenterPoint Energy, Inc. CenterPoint Energy, Inc. Xcel Energy Public Service Enterprise Group Dominion Resources, Inc. Vectren Corporation Unitil Corporation CenterPoint Energy, Inc. Pinnacle West Capital Corp Wisconsin Energy Corporation Arizona Public Service Co Arizona Public Service Co CenterPoint Energy, Inc. Xcel Energy NextEra Energy PPL Corporation National Grid Arizona Public Service Co FirstEnergy Corporation CenterPoint Energy, Inc. CenterPoint Energy, Inc. Pinnacle West Capital Corp Arizona Public Service Co Ameren Services CenterPoint Energy, Inc. Arizona Public Service Co Entergy Corporation CenterPoint Energy, Inc. Arizona Public Service Co Arizona Public Service Co Vectren Corporation Pinnacle West Capital Corp Arizona Public Service Co CenterPoint Energy, Inc. PG&E Corporation 9 Name Company Bryan Kearney John Kellum Carla Kneipp Floyd LeBlanc Norm Lent Barbara Lockwood Bill Libro Paul Lobo George Long Ken Lynch Kiran Malone Christine Martin Bruce McKay Tammy McLeod Tom Meissner Kenny Mercado Mark Miller Robert Mosher Dan Murray Lee Nickloy Matt Nugen Dana O’Brien Sue Ortenstone Katie Ott Jessica Pacheco Nelson Perez Amy Plaster Nina Plaushin Stephen Plevniak Amy Pressler John Rainbolt Joanne Raphael Bill Rogers Rick Schach Conrad Schatte Mike Sewell John Slanina Vincent Sorgi Victor Staffieri Paul Thompson Lorna Wisham Orr Arizona Public Service Co CenterPoint Energy, Inc. CenterPoint Energy, Inc. CenterPoint Energy, Inc. Arent Fox Arizona Public Service Co ALLETE Policy Integration Partners, LLC Unitil Corporation PPL Corporation CMS Energy Corporation PPL Corporation Dominion Arizona Public Service Co Unitil Corporation CenterPoint Energy, Inc. AES Corporation National Grid Southern Company Pinnacle West Capital Corp WEC Energy Group CenterPoint Energy, Inc. CenterPoint Energy, Inc. Exelon Corporation Arizona Public Service Co National Grid CMS Energy Corporation ITC Holdings Corporation Xcel Energy Edison International Alliant Energy Corporation PPL Corporation CenterPoint Energy, Inc. Vectren Corporation Entergy Corporation Duke Energy CenterPoint Energy, Inc. PPL Corporation LG&E and KU Energy LLC LG&E and KU Energy LLC FirstEnergy Corporation Jeanne Wolak Southern Company 2016 Individual Contributions The following EEI employees have given personal contributions or commitments to PowerPAC since January 1, 2016 Name Name Scott Aaronson Eric Ackerman Mark Agnew Sarah Ball Taylor Beis Adam Benshoff Rich Bozek David Bridges Bruce Brown Victoria Calderon Kwame Canty Ed Comer Adam Cooper Chris Eisenbrey Jacque Elliot Brian Farrell Emily Fisher Mary Randolph Gannon Randall Graham Eric Grey Becky Harsh Knox Mat Hastings Maryanne Hatch Chris Hickling Jeanny Ho Eric Holdsworth Meg Hunt Clare James Johnson Lawrence Jones Katie Key Steve Keisner John Kinsman Tom Kuhn Rick Loughery Brian McCormack Jennifer McKinney Richard McMahon Wallace Mealiea Mary Miller Philip Moeller Jon Myers Niki Nelson Gayle Novak Richard O'Grady Karen Obenshain Cal Odom Terri Oliva Jeff Ostermayer Jim Owen David Owens Mark Planning Jessica Powers Marc Razeghi Jim Roewer Steve Rosenstock John Schlenker Angela Schunk Quin Shea Jason Smith Louise Smoak Kathy Steckelberg Liz Stipnieks Rick Tempchin Charles Van Someren Brad Viator Stephanie Voyda Richard Ward Karla Whiting Brian Wolff Lisa Wood 2016 PAC-to-PAC Contributions PAC-to-PAC contributions or commitments since January 1, 2016 10 PAC AEP Committee for Responsible Government Alliant Energy Corporation Employee’s PAC ALLETE PAC Ameren FED PAC AVANGRID PAC Berkshire Hathaway Energy PAC Dominion PAC DTE Energy PAC Duke Energy PAC Energy Future Holdings PAC ENPAC - Entergy Corporation Exelon PAC FirstEnergy PAC National Grid PAC NextEra Energy PAC NiSource Inc. PAC OGE Energy Corporation Employees PAC Pepco Holdings Inc. PAC PG&E Corporation Employees EnergyPAC Pinnacle West Capital Corporation PAC PPL People for Good Government PAC Public Service Enterprise Group Inc. PAC SCANA Corporation Federal PAC Southern Company Employees PAC TECO Energy Employee’s PAC Vectren Corporation Employees Federal PAC Xcel PAC 11 Contribution $5,000.00 $5,000.00 $1,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $2,500.00 $5,000.00 $5,000.00 $5,000.00 $4,000.00 $5,000.00 $2,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $2,500.00 $5,000.00 $3,000.00 $2,500.00 $5,000.00 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Congresswoman Terri Sewell Terri Sewell for Congress Democratic Candidate $1,000.00 Senator Lisa Murkowski Lisa Murkowski for Senate Republican Candidate $5,000.00 Senator Lisa Murkowski Denali Leadership PAC Republican Leadership $10,000.00 Congressman Paul Gosar Congresswoman Ann Kirkpatrick Congresswoman Kyrsten Sinema Senator John McCain Paul Gosar for Congress Republican Candidate $2,500.00 Kirkpatrick for Arizona Democratic Candidate $2,500.00 Democratic Candidate $5,000.00 Republican Candidate $10,000.00 Congressman Xavier Becerra Becerra for Congress Democratic Candidate $2,000.00 Congressman Kenneth Calvert Republican Candidate $1,000.00 Democratic Candidate $2,000.00 Congressman Jim Costa Ken Calvert for Congress Tony Cardenas for Congress Jim Costa for Congress Democratic Candidate $5,000.00 Congressman Jeff Denham Denham for Congress Republican Candidate $1,000.00 Congresswoman Doris Matsui Matsui for Congress Kevin McCarthy for Congress Majority Committee PAC Democratic Candidate $1,000.00 Republican Candidate $10,000.00 Republican Leadership $10,000.00 Democratic Candidate $2,000.00 Republican Candidate $3,000.00 Congressman Devin Nunes McNerney for Congress Devin Nunes Campaign Committee New PAC Republican Leadership $2,500.00 Congressman Eric Swalwell Swalwell for Congress Democratic Candidate $2,000.00 Congressman David Valadao Valadao for Congress Republican Candidate $2,000.00 Congressman Jim Himes Himes for Congress Democratic Candidate $2,000.00 Senator Chris Murphy Friends of Chris Murphy Democratic Candidate $1,000.00 Congressman Gus Bilirakis Bilirakis for Congress Republican Candidate $1,000.00 Alabama Alaska Arizona Kyrsten Sinema for Congress Friends of John McCain California Congressman Tony Cardenas Congressman Kevin McCarthy Congressman Kevin McCarthy Congressman Jerry McNerney Congressman Devin Nunes Connecticut Florida 12 2015-2016 PowerPAC Disbursements State Candidate Name Florida, Continued Congresswoman Gwen Graham Senator Marco Rubio Congresswoman Debbie Wasserman-Schultz Georgia Committee Party Type Amount Graham for Congress Democratic Candidate $1,000.00 Marco Rubio for Senate Republican Candidate $5,000.00 Democrats Win Seats PAC Democratic Leadership $2,500.00 Democrat Candidate $1,000.00 Republican Candidate $7,500.00 Senator Johnny Isakson Sanford Bishop for Congress Georgians for Isakson Congressman Tom Rice Tom Rice for Congress Republican Candidate $2,000.00 Senator Mike Crapo Mike Crapo for US Senate Republican Candidate $1,000.00 Congressman Mike Simpson Simpson for Congress Republican Candidate $5,000.00 Senator Jim Risch Jim Risch for US Senate Republican Candidate $1,000.00 Senator Jim Risch Save America PAC Republican Leadership $2,500.00 Friends of Cheri Bustos Democratic Candidate $2,000.00 Rodney Davis for Congress Randy Hultgren for Congressman Randy Hultgren Congress Congressman Adam Kinzinger Kinzinger for Congress Republican Candidate $1,000.00 Republican Candidate $1,000.00 Republican Candidate $2,000.00 Senator Mark Kirk Kirk for Senate Republican Candidate $2,500.00 Congressman Darin LaHood LaHood for Congress Republican Candidate $1,000.00 Congressman Bobby Rush Citizens for Rush Democratic Candidate $5,000.00 Congressman John Shimkus Volunteers for Shimkus Republican Candidate $7,500.00 Congressman John Shimkus John S Fund Republican Leadership $5,000.00 Friends of Susan Brooks Republican Candidate $2,000.00 Hoosiers First PAC Democratic Leadership $2,500.00 Congressman Luke Messer Luke Messer for Congress Republican Candidate $2,000.00 Congressman Peter Visclosky Visclosky for Congress Democratic Candidate $2,000.00 Congressman David Loebsack Loebsack for Congress Democratic Candidate $2,000.00 Congressman Sanford Bishop Idaho Illinois Congresswoman Cheryl Bustos Congressman Rodney Davis Indiana Congresswoman Susan Brooks Senator Joseph Donnelly Iowa 13 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Congressman Mike Pompeo Pompeo for Congress Republican Candidate $1,000.00 Congresswoman Lynn Jenkins Lynn Jenkins for Congress Republican Candidate $2,000.00 Senator Jerry Moran Moran for Kansas Republican Candidate $2,500.00 Congressman Brett Guthrie Guthrie for Congress Republican Candidate $3,000.00 Senator Mitch McConnell Bluegrass Committee Republican Leadership $10,000.00 Congressman Ed Whitfield Whitfield for Congress Republican Candidate $2,500.00 Congressman John Yarmuth Yarmuth for Congress Democratic Candidate $2,000.00 Congressman Cedric Richmond Richmond for Congress Democratic Candidate $4,500.00 Congressman Stephen Scalise Scalise for Congress Republican Candidate $10,000.00 Congressman Stephen Scalise The Eye of the Tiger PAC Republican Leadership $10,000.00 Senator Bill Cassidy CASS PAC Republican Leadership $2,000.00 Democratic Whip Steny Hoyer Hoyer for Congress Democratic Candidate $10,000.00 Democratic Whip Steny Hoyer AMERIPAC Democratic Leadership $10,000.00 Congressman Joe Kennedy Joe Kennedy for Congress Democratic Candidate $2,000.00 Congressman Richard Neal Richard Neal for Congress Democratic Candidate $2,000.00 Congressman Mike Bishop Republican Candidate $1,000.00 Democratic Candidate $2,000.00 Congressman Saner Levin Mike Bishop for Congress Debbie Dingell for Congress Levin for Congress Democratic Candidate $2,000.00 Congressman Fred Upton Upton for All of Us Republican Candidate $10,000.00 Congressman Fred Upton Trust PAC Republican Leadership $10,000.00 Congressman Erik Paulsen Friends of Erik Paulsen Republican Candidate $1,500.00 Congressman Gregg Harper Gregg Harper for Congress Republican Candidate $2,000.00 Kansas Kentucky Louisiana Maryland Massachusetts Michigan Congresswoman Debbie Dingell Minnesota Mississippi 14 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Congressman Bennie Thompson Friends of Bennie Thompson Democratic Candidate $5,000.00 Senator Roy Blunt Friends of Roy Blunt Republican Candidate $6,000.00 Congressman Sam Graves Graves for Congress Republican Candidate $1,000.00 Congressman Billy Long Congressman Blaine Luetkemeyer Senator Claire McCaskill Billy Long for Congress Republican Candidate $3,000.00 Blaine for Congress Republican Candidate $1,000.00 McCaskill for Missouri Democratic Candidate $1,000.00 Congressman Jason Smith Jason Smith for Congress Republican Candidate $1,000.00 Congresswoman Ann Wagner Ann Wagner for Congress Republican Candidate $1,000.00 Congressman Rodney Frelinghuysen Congressman Leonard Lance Frelinghuysen for Congress Lance for Congress Republican Candidate $2,000.00 Republican Candidate $2,000.00 Congressman Frank LoBiondo Republican Candidate $1,000.00 Republican Candidate $1,000.00 Congressman Donald Norcross LoBiondo for Congress Tom MacArthur for Congress, Inc. Norcross for Congress Democratic Candidate $4,500.00 Congressman Frank Pallone Pallone for Congress Democratic Candidate $2,500.00 Friends of Michelle Democratic Candidate $2,000.00 LOBO PAC Republican Leadership $1,500.00 Congressman Ben Ray Lujan People for Ben Democratic Candidate $5,000.00 Congressman Chris Collins Chris Collins for Congress Republican Candidate $2,000.00 Congressman Joseph Crowley Crowley for Congress Democratic Candidate $2,000.00 Congressman Steve Israel Steve Israel for Congress Democratic Candidate $2,000.00 Congressman John Katko Katko for Congress Republican Candidate $2,000.00 Congressman Paul Tonko Paul Tonko for Congress Democratic Candidate $2,000.00 Congressman Tom Reed Tom Reed for Congress Republican Candidate $3,000.00 Senator Charles Schumer Friends of Schumer Democratic Candidate $8,000.00 Mississippi, continued Missouri New Jersey Congressman Tom MacArthur New Mexico Congresswoman Michelle Lujan Grisham Senator Martin Heinrich New York 15 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Republican Candidate $6,000.00 Republican Candidate $2,000.00 Republican Candidate $1,500.00 Republican Candidate $2,000.00 North Carolina Congressman Richard Hudson The Richard Burr Committee Renee Ellmers for Congress George Holding for Congress Hudson for Congress Congressman Patrick McHenry More Conservatives PAC Republican Leadership $1,000.00 Congressman Kevin Cramer Cramer for Congress Republican Candidate $4,000.00 Senator Heidi Heitkamp Dakota Prairie PAC Democratic Leadership $5,000.00 Senator John Hoeven Hoeven for Senate Republican Candidate $1,000.00 Congresswoman Joyce Beatty Democratic Candidate $2,000.00 Democratic Candidate $2,000.00 Congressman Robert Gibbs Beatty for Congress Marcia Fudge for Congress Gibbs for Congress Republican Candidate $1,000.00 Congressman Bill Johnson Johnson for Congress Republican Candidate $4,500.00 Congresswoman Marcy Kaptur Kaptur for Congress Democratic Candidate $2,500.00 Congressman Robert Latta Republican Candidate $1,000.00 Republican Candidate $2,500.00 Congressman Jim Renacci Latta for Congress Portman for Senate Cmte. Jim Renacci for Congress Republican Candidate $2,000.00 Congressman Steve Stivers Stivers for Congress Republican Candidate $4,500.00 Congressman Patrick Tiberi Tiberi for Congress Republican Candidate $3,500.00 Speaker John A. Boehner Friends of John Boehner Republican Candidate $5,000.00 Speaker John A. Boehner Freedom Project Republican Leadership $5,000.00 Republican Leadership $5,000.00 Republican Candidate $2,500.00 Senator Richard Burr Congresswoman Renee Ellmers Congressman George Holding North Dakota Ohio Congresswoman Marcia Fudge Senator Rob Portman Oklahoma Senator Jim Inhofe Congressman James Lankford Fund for a Conservative Future Families for James Lankford Congressman Markwayne Mullin Mullin for Congress Republican Candidate $4,500.00 Congressman Gregory Walden Walden for Congress Republican Candidate $5,000.00 Congressman Gregory Walden New Pioneers PAC Republican Leadership $10,000.00 Oregon 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Democratic Candidate $2,000.00 Democratic Leadership $5,000.00 Oregon, continued Congressman Kurt Schrader Senator Ron Wyden Kurt Schrader for Congress Holding Onto Oregon's Priorities Pennsylvania Congressman Michael Doyle Doyle for Congress Democratic Candidate $5,000.00 Congressman Patrick Meehan Pat Meehan for Congress Republican Candidate $1,000.00 Congressman Tim Murphy Tim Murphy for Congress Republican Candidate $2,000.00 Congressman Bill Shuster Bill Shuster for Congress Republican Candidate $5,000.00 Senator Pat Toomey Friends of Pat Toomey Republican Candidate $5,000.00 Congressman Jim Clyburn Friends of Jim Clyburn Democratic Candidate $10,000.00 Congressman Jim Clyburn BRIDGE PAC Democratic Leadership $10,000.00 Senator Tim Scott Tim Scott for Senate Republican Candidate $4,000.00 Senator John Thune Friends of John Thune Republican Candidate $5,000.00 Republican Candidate $5,000.00 Republican Candidate $1,000.00 Republican Candidate $5,000.00 South Carolina South Dakota Texas Congressman Kevin Brady The Congressman Joe Barton Committee Michael Burgess for Congress Brady for Congress Congressman Gene Green Gene Green for Congress Democratic Candidate $2,500.00 Congressman Jeb Hensarling Friends of Jeb Hensarling Republican Candidate $1,000.00 Congressman William Hurd Hurd for Congress Republican Candidate $7,500.00 Congressman Michael McCaul Republican Candidate $3,000.00 Republican Candidate $2,000.00 Republican Candidate $1,000.00 Congressman Mac Thornberry McCaul for Congress Olson for Congress Committee Pete Sessions for Congress Thornberry for Congress Republican Candidate $1,000.00 Congressman Rob Bishop Rob Bishop for Congress Republican Candidate $3,000.00 Congressman Joseph Barton Congressman Michael Burgess Congressman Pete Olson Congressman Pete Session Utah 17 2015-2016 PowerPAC Disbursements State Candidate Name Committee Party Type Amount Senator Orrin Hatch Hatch Election Committee Republican Candidate $1,000.00 Congressman Peter Welch Welch for Congress Democrat Candidate $1,000.00 Congressman Morgan Griffith Morgan Griffith for Congress Republican Candidate $4,000.00 Senator Tim Kaine Kaine for Virginia Democratic Candidate $4,000.00 Senator Patty Murray People for Patty Murray Democratic Candidate $2,500.00 Congressman David McKinley McKinley for Congress Republican Candidate $1,000.00 Congressman Sean Duffy Duffy for Congress Republican Candidate $2,000.00 Senator Ron Johnson Ron Johnson for Senate Republican Candidate $3,500.00 Congressman Ron Kind Kind for Congress Democratic Candidate $2,000.00 Congressman Reid Ribble Ribble for Congress Republican Candidate $1,000.00 Speaker Paul D. Ryan Ryan for Congress Republican Candidate $10,000.00 Speaker Paul D. Ryan Prosperity Action Inc. Republican Leadership $10,000.00 Hillary Clinton Hillary for America Democratic Candidate $5,000.00 Blue Dog Political Action Committee Democratic Caucus PAC $10,000.00 CHC BOLD PAC Democratic Caucus PAC $10,000.00 Congressional Black Caucus PAC Democratic Caucus PAC $10,000.00 New Democrat Coalition PAC Democratic Caucus PAC $10,000.00 Republican Main Street Partnership PAC Republican Caucus PAC $5,000.00 Democratic Congressional Campaign Committee Democratic Party $30,000.00 Democratic Senatorial Campaign Committee Democratic Party $30,000.00 National Republican Congressional Committee Republican Party $30,000.00 National Republican Senatorial Committee Republican Party $30,000.00 Utah, continued Vermont Virginia Washington West Virginia Wisconsin Presidential Caucuses Political Parties TOTAL 18 $696,000.00 Litigation Report – September 2016 Status of Court and FERC Cases in Which EEI is Involved Directly or as a Coalition Member I. EEI as Direct Participant – Court Cases A. Pending Cases 1. ACI International v. FCC, D.C. Cir. Nos. 15-1211 et al. Issue:  Whether the Federal Communication Commission (FCC) has made reasonable determinations under the Telephone Consumer Protection Act (TCPA) as to three constraints on contacting customers. Background:  The TCPA is aimed at protecting especially wireless phone users from unwanted automated and prerecorded calls. In the order being appealed, the FCC determined that express consent does not apply beyond one call to reassigned numbers, but provided no means for callers to receive prompt notice of reassignment. The order also left for case-by-case adjudication what constitutes a “reasonable method” for customers to revoke their consent, and it exposed callers to liability for placing manual calls with equipment that if enabled would have autodialing capability.  Various petitioners appealed these issues to the D.C. Circuit. On December 2, 2015, EEI, the American Gas Association, the National Association of Water Companies, and the National Rural Electric Cooperative Association filed an amicus brief supporting the petitions as to the above issues. Status:  All briefs have been filed, and oral argument has been scheduled for October 19, 2016. 1 2. EEI v. FERC, D.C. Cir. Nos. 14-1012 and 14-1071 Issue:  Whether FERC’s order approving use of funds under Federal Power Act (FPA) section 215 to pay an independent entity to carry out Reliability Coordinator (RC) functions in the Western Electricity Coordinating Council (WECC) is permissible. Background:  EEI participated in the FERC proceeding on this issue and then filed a petition for judicial review in the D.C. Circuit, arguing that section 215 funding was inappropriate because the entity performing RC functions was neither the Electric Reliability Organization approved by FERC nor a regional entity established under section 215. On October 3, 2014, persuaded by EEI’s arguments, FERC filed a motion seeking voluntary remand of the case, and FERC committed to file status reports every 60 days. On October 10, the court granted FERC’s motion.  On September 1, 2015, EEI filed a motion at FERC, asking the Commission to vacate the order at issue because WECC had developed an alternative funding mechanism. On March 29, 2016, WECC filed a motion at FERC to terminate the RC agreement at issue, and on April 12, EEI supported that motion. On June 21, FERC granted the motions, terminating the agreement and vacating the provisions of its orders authorizing funding to the independent entity.  On August 9, EEI filed an unopposed motion in the DC Circuit, asking the court to dismiss the case. Status:  The motion to dismiss is pending.  II. EEI as Direct Participant – FERC Cases A. Pending Cases 1. Potomac-Appalachian Transmission Highline (PATH) and PJM Interconnection, Docket Nos. ER09-1256 and ER12-2708 EEI issues:  Whether a FERC Administrative Law Judge (ALJ) erred in recommending that the Commission reduce the return on equity (ROE) for a cancelled transmission project and deny recovery of certain costs related to the project. Background:  In June 2007, pursuant to PJM’s Regional Transmission Expansion Plan (RTEP) process, the PJM Board of Managers (PJM Board) directed Allegheny Power and AEP East companies to construct the PATH project, a 275-mile 765-kV transmission line from West Virginia to Maryland, by 2012. As part of the RTEP process, in 2009 and 2010, PJM twice delayed the in-service date for the project, and on August 24, 2012, PJM terminated the project. 2 On September 28, 2012, PATH submitted an FPA section 205 filing at FERC to recover its costs associated with the project over a five-year period, including a return on the average unamortized balance using PATH’s formula rates.  On September 14, 2015, the ALJ recommended reducing the original approved project ROE of 10.4% to 6.27% because the project was abandoned and denying recovery of a significant portion of expenses that PATH incurred to conduct public outreach and education and to garner public support. PATH appealed.  On October 14, 2015, EEI filed a motion to intervene out-of-time, or in the alternative to participate as an amicus curiae, and a brief on exceptions in support of PATH. We argued that the reduction in ROE for abandoned projects would serve as a significant disincentive to transmission investment at a time when FERC should be fostering development of infrastructure. We also supported recovery of all prudently incurred costs, including the public outreach costs. Status:  EEI’s motion and the overall proceeding are still pending.  2. Belmont Municipal Light Department et al. v. Central Maine Power Company et al., Docket No. EL16-64-00 EEI Issues:  Whether FERC’s practice of setting trial-type hearings for FPA section 206 challenges to transmission ROE, while prior complaints remain pending, is inconsistent with the Act. Background:  Since 2011, the New England Transmission Owners (NETOs) have been the target of four successive complaints attacking the ROE for electric transmission rates in New England.  These complaints have been “pancaked” on top of one another as each successive complaint has been filed before the prior complaint has been resolved, thus serving to extend indefinitely the statutory 15-month refund period.  Absent a change in FERC’s handling of these challenges, the uncertainty that started in 2011 could extend well over a decade by the time this most recent challenge is resolved. On August 4, 2016, EEI filed a motion to intervene and protest in support of the NETOs. We argued that FERC’s current approach contravenes two firmly established principles with respect to the FPA: (1) the Supreme court and other federal courts have repeatedly held that there is no one single just and reasonable rate, but rather a range of just and reasonable rates; and (2) Congress has explicitly directed FERC to limit rate uncertainty due to refund exposure to 15 months. Status:  EEI’s motion and the overall proceeding are pending.  3 III. EEI as Coalition Participant A. Clean Air Act (CAA) 1. Clean Power Plan, West Virginia v. EPA, D.C. Cir. Nos. 15-1363 et al.     The U.S. Environmental Protection Agency (EPA) finalized CAA section 111(d) emission guidelines for regulating greenhouse gas (GHG) emissions from existing fossil-based electric generating units (EGUs) on August 3, 2015. The final guidelines were published in the Federal Register on October 23. Twenty-eight states, several trade groups including the Utility Air Regulatory Group (UARG) of which EEI is a member, and individual companies and utilities appealed the guidelines, and a number of the petitioners sought a stay of the guidelines. Others intervened in support of EPA. Among other issues, the challenges focus on two core legal issues: whether EPA can regulate existing EGUs under CAA section 111(d) given that these units already are regulated under section 112, which addresses hazardous air pollutants (HAPs); and EPA’s authority to consider emission reductions that occur outside of the fence line of the affected unit when setting standards under section 111. On February 9, 2016, the Supreme Court granted a stay of the guidelines pending judicial review. The case is being briefed before the D.C. Circuit, with oral argument scheduled for September 27 before the en banc court. 2. Mercury and air toxics standards (MATS), Michigan v. EPA (formerly White Stallion Energy Center v. EPA), D.C. Cir. Nos. 12-1100 et al.; and UARG v. EPA, D.C. Cir. No. 16-1127 et al.    On June 29, 2015, in a 5-4 decision, the U.S. Supreme Court held that EPA violated the Clean Air Act by failing to consider costs when determining whether it was “appropriate and necessary” to regulate power plant emissions of mercury and other HAPs in the MATS rule. UARG participated in the litigation, including both briefing and oral argument. The Court remanded the case to the D.C. Circuit to address the cost issue. On December 15, a three-judge panel of the D.C. Circuit decided to leave the MATS rule in place while EPA reviewed the rule in light of the Supreme Court’s opinion. On February 24, 2016, a coalition of 20 states asked Chief Justice Roberts to stay further implementation of the rule pending a petition to vacate the standards, though others responded in opposition. On March 3, the Chief Justice denied the request. On March 14, 23 states filed a petition for writ of certiorari with the Supreme Court, seeking to vacate the rule in light of the remand to EPA to consider costs. The Supreme Court denied the petition on June 13. In mid-April, 2016, EPA determined that, considering costs, it is “appropriate and necessary” to regulate HAP emissions from EGUs. In UARG v. EPA, UARG and a group of other stakeholders have challenged this determination in the D.C. Circuit. 4 B. Clean Water Act (CWA) 1. Cooling water intake structures (CWIS)/ CWA section 316(b), CWIS Coalition v. EPA, Second Cir. Nos. 14-4645 et al.    EPA published a final rule governing CWIS at existing facilities on August 15, 2014. The rule required use of impingement-reduction technology at most facilities, with the option to use various pre-approved technologies, and it required evaluation of the need for additional entrainment-reduction measures at most facilities. Closed-cycle cooling was not required but qualified as best technology if used. The U.S. Fish and Wildlife Service and National Marine Fisheries Service issued a voluminous biological opinion on the rule on May 19, 2014, recommending changes that allow the Services to participate actively in the CWIS review process as to potential impacts on species listed under the federal Endangered Species Act (ESA) and their habitat. The Utility Water Act Group (UWAG), of which EEI is a member, along with several industry groups and several environmental non-governmental organizations (ENGOs) filed challenges to the rule in various federal circuit courts of appeal. The cases were consolidated in the Fourth Circuit but then moved to the Second Circuit. On February 24, 2016 the court approved a briefing schedule, which it modified on March 14, with briefs due May 2016 through February 2017. Industry groups including UWAG filed an initial brief on ESA issues on May 20. Remaining briefs will be filed through the end of the year. 2. Multisector stormwater general permit (MSGP), Waterkeeper Alliance v. EPA, Second Cir. Nos. 15-2091(L) et al.    On June 4, 2015, EPA issued a final 2015 MSGP authorizing stormwater discharges associated with industrial activities in states and on tribal lands where EPA issues CWA section 402 permits. The permit will also serve as a model for the 46 states that implement the section 402 program. A number of ENGOs appealed the MSGP, and the cases were consolidated in the Second Circuit. The Federal Water Quality Coalition (FWQC) of which EEI is a member, together with the Federal Storm Water Association, moved to intervene. The ENGOs were likely to argue that EPA should require more numeric limits, application of limits at point of discharge, effluent limitation guidelines, mandatory best management practices, and monitoring tailored by industry sector. The case has just settled, with positive results on the issues of concern to the FWQC. 5 3. NPDES permits for discharges to groundwater, Sierra Club v. VEPCO, E.D. Va. No. 15-112, Yadkin Riverkeeper v. Duke Energy Carolinas, M.D.N.C. No. 14-753, and Hawaii Wildlife Fund v. Maui, Ninth Cir. No. 15-17447    On October 20, 2015, a North Carolina federal district court in the Yadkin case ruled that a suit challenging lack of a section 402 permit could proceed even though the case involved a discharge to groundwater that connected to surface water, not a direct discharge to surface water governed by section 402. On November 6, 2015, a Virginia federal district court in the separate Sierra Club case reached a similar decision. The companies involved both asked their district courts to certify their cases to the Fourth Circuit for interlocutory review of the need for a permit based on a discharge to groundwater, and UWAG sought to file amicus briefs supporting review. But on January 29 and February 2, 2016, the courts denied UWAG’s motions and declined to certify the cases for intermediate review. However, the same issue is in play in the Hawaii case in the Ninth Circuit, where on March 28, 2016, UWAG joined a multi-industry group in challenging use of a groundwater connection to surface water to require an NPDES permit. EPA filed a brief supporting jurisdiction. The case is pending. 4. Nutrients, Gulf Restoration Network v. Gina McCarthy, E.D.LA No. 12-677   On July 29, 2011, EPA denied a petition by ENGOs requesting federal nutrient water quality standards and total maximum daily loads for the Mississippi River basin and Gulf of Mexico. The ENGOs sued, and the FWQC intervened on EPA’s behalf. On April 7, 2015, the Fifth Circuit ruled that EPA can decline to determine whether new standards are needed, if EPA explains its reasoning, and remanded the matter to district court, where briefs have been filed and the case is pending. 5. Permit shield, Ohio Valley Environmental Coalition v. Fola Coal Co., Fourth Circuit No. 16-1024   Fola is appealing a district court decision that the company is not authorized to discharge pollutants not explicitly authorized in its NPDES permit if the discharges cause violations of state water quality standards. On April 20, 2016, UWAG filed a motion for leave to file an amicus brief in support of the company, noting that the CWA’s permit shield allows discharges not proscribed in a permit if disclosed in a permit application. The case is pending. 6. Steam electric effluent limitation guidelines (ELGs), SWEPCO v. EPA, Fifth Cir. Nos. 15-60821 et al.  On September 30, 2015, EPA issued a final rule setting new numeric effluent limitation guidelines for five coal-plant waste streams and retaining existing guidelines with adjustments for other steam-electric plant waste streams. 6   Industry groups including UWAG, and environmental groups, filed four separate petitions for judicial review, in the Second, Fifth, Eighth, and Ninth Circuits. On November 3, the petitions were consolidated in the Fifth Circuit. On January 8 and again on April 15, 2016, the parties filed joint motions to put the case on hold until they could file a proposed briefing schedule, which they filed on April 29. The parties are now focused on EPA providing a more complete administrative record. 7. Waters of the United States (WOTUS), In Re EPA-Corps WOTUS Rule, Sixth Cir. Nos. 15-3799 et al.      On June 29, 2015, EPA and the U.S. Army Corps of Engineers published an expansive final rule as to types of “waters” subject to federal jurisdiction under the CWA. The rule identifies six broad categories of “water” features that will automatically be viewed as jurisdictional and two that may be jurisdictional if there is a “significant nexus” with other waters. UWAG, more than 30 states, a number of ENGOs, and a number of other industry groups have filed challenges to the rule in federal district and circuit courts. Two of the district courts dismissed their cases as belonging in appellate court, a third one in North Dakota proceeded to briefing, and the remaining district courts put their cases on hold pending appellate review of the proper venue. The circuit court cases were consolidated in the Sixth Circuit, which in a 2:1 panel order issued a nationwide stay of the rule and in a 1:1:1 order determined that the case belongs in appellate court. The parties including UWAG sought but were denied rehearing en banc of the venue order. One or more parties may seek Supreme Court review of the venue issue. Meanwhile, the parties are focusing on gaps in the administrative record provided by EPA, with merits briefs to follow. The Tenth and Eleventh Circuits have been hearing appeals of the two district court dismissals. This could lead to a second opinion on the venue issue and, if the circuits conflict, could lead to Supreme Court review of the issue. The Eleventh Circuit has just stayed the appeal in its case pending a merits decision by the Sixth Circuit. The U.S. is asking the Tenth Circuit to deny the other appeal. C. Endangered Species Act (ESA) 1. Blueback herring, NRDC v. Sobeck, D.D.C. No. 1:15-cv-00198-RDM   On August 12, 2013, the National Marine Fisheries Service determined that listing of the blueback herring, a fish species along the east coast of the U.S. and Canada, is not currently warranted. NRDC et al. challenged the Service’s analysis of population and sub-population levels and trends, arguing in favor of listing. UWAG filed an amicus brief on February 19, 2016, supporting the Service. 7 2. Northern Long-Eared Bat, CBD and DOW v. Ashe, D.C.C. Nos. 1:15-cv00477 and 1:15-cv-910    In April 2015, the U.S. Fish and Wildlife Service listed the Northern Long-Eared Bat (NLEB) as threatened and issued a relatively workable ESA section 4(d) rule authorizing activities unlikely to harm the species. On April 2 and May 12, the Center for Biological Diversity and Defenders of Wildlife filed lawsuits challenging the listing as threatened instead of endangered and the 4(d) rule. UWAG and the Energy and Wildlife Action Committee (EWAC), of which EEI also is a member, plan to file a joint amicus brief in support of the Service. D. Solid Waste 1. Coal combustion residuals, USWAG v. EPA, D.C. Cir. No. 15-1219     On April 17, 2015, EPA published a final rule addressing management of coal combustion residuals under the Resource Conservation and Recovery Act (RCRA). On July 15, 2015 the Utility Solid Waste Activities Group (USWAG) together with the American Public Power Association, EEI, and the National Rural Electric Cooperative Association filed a petition for review of the rule in the DC Circuit. Other parties including five industry petitioners and a group of ENGOs also filed suits, and all the cases have been consolidated. USWAG challenged certain aspects of the rule on statutory and procedural grounds. Initial briefs were filed December 18. On April 18, 2016, EPA filed an unopposed motion for partial remand, reflecting settlement with industry and environmental petitioners of certain claims raised in the litigation. The motion for partial remand was granted by the court on June 24. Also on April 18, EPA filed a response brief as to remaining claims. Reply briefs were filed July 14, the joint appendix was filed August 4, and final briefs will be filed September 6. 2. Solid waste definition, API v. EPA, D.C. Cir. Nos. 09-1038 et al.  On January 13, 2015, EPA published a final rule on the definition of solid waste under RCRA. The final rule made a number of changes, the most significant of which from the industry’s perspective are that it replaced the transfer-based exclusion with a verified-recycler exclusion, established a uniform legitimaterecycling standard, and defined sham recycling.  On April 9, 2015, USWAG of which EEI is a member filed suit in the D.C. Circuit, focusing on the impact of the rule on utility used-oil recycling. Initial briefs were filed December 9, and final briefs were filed June 9, 2016. Oral argument is scheduled for October 21. 8 EEI Emergency Response Awards The next submission deadline is October 28th 2016. The EEI Emergency Response Awards were created in 1998 to recognize member companies that put forth outstanding efforts to restore service or to assist another company following a natural disaster. Award-winning companies have faced the worst that Mother Nature can throw at them, and brought the power back on quickly and safely, often under challenging conditions. Any EEI U.S. or International electric company member is eligible for the awards and may nominate itself or another EEI member. The awards are provided in two categories: - The Emergency Recovery Award is for companies that are directly impacted; The Emergency Assistance Award is for companies that come to the aid of others. EEI presents the awards at the January and June CEO and Board conferences. Nominations for events which occurred in the period of April to October are accepted in late October, while nominations for late fall and winter events are due in early April. 2016 June Recovery Award Recipients - Avista Corporation – Wind Storm - November 2015 - Duke Energy - Winter Storm Jonas - January 2016 - Florida Power & Light Company – Tornado and Severe Weather – January 2016 - Hydro One - High Winds - December 2015 - National Grid – Snowstorm - February 2016 - Oklahoma Gas & Electric – Ice Storm - November & Winter Storm Goliath - December - PRECO – Thunderstorms - June 2015 - Xcel Energy – Winter Storm Goliath - December 2015 2016 June Assistance Award Recipients - Indianapolis Power & Light – Indiana Winter Storm and Blizzard - February 2016 - Kansas City Power & Light Company – IL & MO Snow Storm - February 2016 o Illinois Winter Storm Goliath - December 2015 - National Grid – Winter Storm Jonas – January 2016 Reliability & Business Continuity EEI Spring Board and Chief Executives Meeting – September 6-8, 2016 Electricity Subsector Coordinating Council (ESCC) Strategic Infrastructures Coordinating Council In March 2015 the National Infrastructure Advisory Council (NIAC) recommended that senior executives from the nation’s most critical infrastructure sectors—electricity, financial services, and communications—should identify mutual priorities and develop joint recovery action plans. In an effort to build on these recommendations and to improve operational, strategic, and policy coordination, the three Sector Coordinating Councils are organizing an industry-led partnership of senior executives to set strategic goals and policies that align and enhance security and preparedness initiatives across industries and with the government. Presidential Policy Directive (PPD)-41, United States Cyber Incident Coordination President Obama issued PPD-41, United States Cyber Incident Coordination, on July 26. The PPD outlines the federal government’s roles and approach to significant cyber incidents. As the electric power sector prepares for major cyber incidents through the Cyber Mutual Assistance Program, and other industry and ESCC initiatives, PPD-41 serves as the guiding principles for how our government counterparts will organize to respond to a cyber disruption. The PPD and associated details will be adopted and further integrated into ESCC and industry response planning. Cyber Mutual Assistance Program Bill Fehrman, President and CEO of MidAmerican Energy, will provide an update on the recently formed Cyber Mutual Assistance Program, an initiative of the ESCC to provide surge capacity to electric utilities in the event of a large scale cyber security event affecting utility operations. CEOs will be invited to have their company participate in a Cyber Mutual Assistance drill to be held later in September, and consider outreach to public power utilities and cooperatives near their service territory to join this important program. E-ISAC Member Executive Committee (MEC) After nearly one year of providing leadership and expertise to guide and support the E-ISAC, the MEC conducted a survey of industry members to determine the overall effectiveness of the E-ISAC. Mark Ruelle, President and CEO of Westar Energy and Vice-Chair, E-ISAC MEC, will provide the key findings and next steps for continuing to improve the value of E-ISAC products and services and member engagement. The MEC will be meeting in Colorado Springs on Thursday, September 8 to focus on portal improvements and long-term planning. Supplemental Operations Strategies Following GridEx III in November 2015 and the cyber incident affecting Ukrainian power companies, there has been a focus on operating the electric grid under sub-optimal circumstances. Whether resorting to manual operations, engaging in planned separations, leveraging secondary and tertiary back-up systems, or operating in other degraded states, the ESCC has asked grid experts to explore “extraordinary measures” that can be anticipated, planned for, and practiced so these are not being contemplated for the first time during an incident. Reliability and Business Continuity EEI Spring Board and Chief Executives Meeting – September 6-8, 2016 Billy Ball, Chief Transmission Officer for Southern Company, will discuss his work with the North American Transmission Forum and EPRI, as well as other subject matter experts around the industry, on the contingency planning now underway to prepare for these extraordinary events. Electric Power Research Institute (EPRI) Electromagnetic Pulse (EMP) Project Mike Howard, President and CEO for EPRI will discuss the progress of their recently launched EMP Project. The EPRI EMP Project is providing a scientific basis for investments to mitigate EMP threats to the energy grid, inform response and recovery efforts, and develop partnerships across industry and with the government to help the nation’s critical infrastructure better prepare for existential threats to the grid. Spare Transformer Survey Pursuant to the FAST Act of 2015, the U.S. Department of Energy (DOE) was directed to prepare and submit, within one year, a plan to Congress to establish a Strategic Transformer Reserve for the storage of large spare power transformers, spare emergency substations, and other vital spare bulk electric grid equipment. In 2016 DOE contracted Oak Ridge National Laboratory to conduct the technical analysis on the threshold question on whether a reserve is needed. This session will provide the Board with an update on the electric subsector’s and EEI’s efforts—under the leadership of the CEO Policy Committee on Reliability and Business Continuity—to inform this important technical analysis. FERC / NERC Reliability Policy Over the past year, FERC has increasingly relied upon its rulemaking authority to address evolving security and reliability concerns. For example, FERC has issued orders directing NERC to modify various Critical Infrastructure Protection Cyber Security Standards to address lessons learned from recent events such as the Ukrainian cyber-attack and to develop a new cybersecurity supply chain standard. Congress also gave FERC new authority under the FAST Act to better protect and share critical electric infrastructure information. EEI’s Phil Moeller will provide an overview on current reliability policy efforts and ask for increased member company support and participation. Reliability Executive Advisory Committee (REAC) Through REAC, EEI develops its views on reliability-related policies at FERC and NERC for the bulk electric power system. This group, supported by subject matter experts, steers EEI comment development and policy positions in response to FERC rulemakings and other FERC / NERC reliability initiatives. Given the recent FERC actions, EEI holds a strong conviction on the need to increase its engagement with FERC Commissioners and staff, which will require additional member commitment to the REAC. NERC Supply Chain Risk Management Reliability Standard In July, FERC issued a final rule directing NERC to develop a new or modified reliability standard to address supply chain cybersecurity risk management. EEI had taken a strong position that such requirements were unnecessary to support reliability and potentially created significant business risks in negotiating with third-party vendors. NERC has one year to file the new standard at FERC, which will focus on vendor risk management, including software integrity and authenticity, remote access, information system planning, and procurement controls. REAC has identified a number of strong candidates to serve on the NERC standards drafting team, who have submitted nominations to NERC. REAC will continue to engage with NERC management, the standards drafting team, and other trade associations, to ensure a timely, responsive, and complete response to the FERC directive. 2 2016 Fall Meeting Reliability and Business Continuity Topics — EEI Board Thursday, September 8, 2016  9:00 AM - 9:45 AM The Broadmoor  I. Electricity Subsector Coordinating Council (ESCC) —Tom Fanning a. Strategic Infrastructures Coordinating Council (SICC) b. Presidential Policy Directive 41 -- United States Cyber Incident Coordination c. Cyber Mutual Assistance — Bill Fehrman d. E-ISAC Member Executive Committee Update — Mark Ruelle e. Supplemental Operations Strategies — Billy Ball f. Electric Power Research Institute EMP Project — Mike Howard II. Spare Transformer Survey – DOE Implementation of FAST Act — Jim Torgerson III. FERC/NERC Reliability Policy — Phil Moeller a. Reliability Executive Advisory Committee (REAC) b. NERC Supply Chain Risk Management Reliability Standard Rev 08/22/2016a Colorado Springs, CO U.S. Department of Energy and Presidential Policy Directive – 41, United States Cyber Incident Coordination Update August 2, 2016 Distribution: Electricity Subsector Coordinating Council, Oil and Natural Gas Subsector Coordinating Council, Energy Government Coordinating Council, Electricity, Oil and Natural Gas, and Downstream Natural Gas ISACs Contact: CyberEnergy@hq.doe.gov, Infrastructure Security and Energy Restoration Division, Office of Electricity Delivery and Energy Reliability, U.S. Department of Energy OVERVIEW On July 26, President Obama signed Presidential Policy Directive/PPD-41, United States Cyber Incident Coordination (PPD). The PPD outlines the Federal government’s roles and approach to significant cyber incidents. As the Sector-Specific Agency (SSA) for the energy sector, DOE hosted a conference call with electricity and oil and natural gas sector partners to discuss specific implications to the energy sector. This document was developed as a follow-up to the call. PPD PRINCIPLES The PPD outlines five principles that will guide the Federal government during cyber incident response efforts: 1. Shared Responsibility – Individuals, the private sector, and government agencies have a shared vital interest and complementary roles and responsibilities in protecting the Nation from malicious cyber activity and managing cyber incidents and their consequences. 2. Risk-Based Response – The Federal government will determine its response actions and resource needs based on an assessment of the risks posed to an entity, national security interests, foreign relations, or economy of the United States or to the public confidence, civil liberties, or public health and safety of the American people. 3. Respecting Affected Entities – Federal government responders will safeguard details of the incident, as well as privacy and civil liberties, and sensitive private sector information. 4. Unity of Effort – Whichever Federal agency first becomes aware of a cyber incident will rapidly notify other relevant Federal agencies in order to facilitate a unified Federal response and ensure that the right combination of agencies responds to a particular incident. 5. Enabling Restoration and Recovery – Federal response activities will be conducted in a manner to facilitate restoration and recovery of an entity that has experienced a cyber incident, balancing investigative and national security requirements with the need to return to normal operations as quickly as possible. PPD-41 DOE Update Page 1 of 4 SIGNIFICANT CYBER INCIDENTS This PPD focuses on the Federal response to significant cyber incidents. A significant cyber incident is one that either singularly or as part of a group of related incidents is likely to result in demonstrable harm to the national security interests, foreign relations, or economy of the United States or to the public confidence, civil liberties, or public health and safety of the American people. See here for the White House Incident Severity Schema: https://www.whitehouse.gov/sites/whitehouse.gov/files/documents/Cyber%2BIncident%2BSeverity%2B Schema.pdf FEDERAL RESPONSE STRUCTURE The Department of Energy, as the Sector-Specific Agency (SSA) for energy, plays a role in all aspects of incident response and ensures response efforts take into account unique characteristics of the energy sector being affected. The Department will play a role across the following lines of effort: • • • Threat Response, coordinated by the FBI, includes the law enforcement and national security investigation of a cyber incident, including collecting evidence, linking related incidents, gathering intelligence, identifying opportunities for threat pursuit and disruption, and providing attribution; Asset Response, coordinated by DHS, includes providing technical assets and assistance to mitigate vulnerabilities and reducing the impact of the incident, identifying and assessing the risk posed to other entities and mitigating those risks, and providing guidance on how to leverage Federal resources and capabilities; and Intelligence Support and related activities coordinated by the Office of the Director of National Intelligence, includes intelligence collection in support of investigative activities, and integrated analysis of threat trends and events to build situational awareness. INCIDENT REPORTING The PPD encourages voluntary incident reporting to the appropriate Federal agency. For Law Enforcement, cyber incidents can be reported to the local field offices of Federal law enforcement such as the FBI, U.S. Secret Service, or Homeland Security Investigation/ICE. Reporting cyber incidents for assistance in recovery can be made to the Department of Homeland Security’s National Cybersecurity and Communications Integration Center (NCCIC) through the US-CERT. For who to contact regarding cyber incidents, please see refer to the Cyber Incident Reporting: A Unified Message for Reporting to the Federal Government document: https://www.dhs.gov/sites/default/files/publications/Cyber%20Incident%20Reporting%20United%20Mes sage.pdf PPD-41 DOE Update Page 2 of 4 PPD ACTION ITEMS AND DEADLINES The PPD includes several deadlines for DOE as the SSA, which may require coordination with industry through the Sector Coordinating Councils to ensure industry considerations are included. These deadlines are: • • • • Within 90 days, the White House’s National Security Council staff will update its charter to address the tenants of the PPD and update the charter to the Cyber Response Group Interagency Policy Committee, the body responsible for coordinating interagency policy for cyber response. Additionally, Federal Departments and agencies will develop or update Enhanced Coordination Procedures. Enhanced Coordination Procedures will be developed for situations in which the demands of significant cyber incidents exceed the Department’s standing capacity to respond to the incident. DOE will also develop or update sector-specific procedures in consultation with the energy sector through the trade associations and Sector Coordinating Councils. Within 120 days, DOE is responsible for synchronizing sector-specific planning efforts with owners and operators. DOE, in collaboration with the sector coordinating councils and ISACs, is responsible for ensuring that the sector-specific incident response playbooks align with the principles of PPD-41. Within 150 days, FEMA will update training for the Unified Coordination Group (a body of specified senior public and private leaders to coordinate all aspects of an incident). DOE is required to update emergency responder training to include cyber incidents, and identify a cadre of personnel qualified in the National Incident Management System and Unified Coordination to manage and respond to a significant cyber incident. Within 180 days, DOE will have integrated these planning efforts into its exercise design and schedules. DOE is also working with DHS and the Department of Justice on an update to the National Cyber Incident Response Plan (NCIRP). The NCIRP is being developed in consultation with SLTT governments, sector coordinating councils, information sharing and analysis organizations, owners and operators of critical infrastructure, and other appropriate entities and individuals. Questions relating to the NCIRP can be directed to the NCIRP mailbox at FEMANCIRP@fema.dhs.gov. For a full list of actions required by PPD-41, refer to the PPD-41 Annex: https://www.whitehouse.gov/the-press-office/2016/07/26/annex-presidential-policy-directive-unitedstates-cyber-incident. These actions represent the first step of many in implementing the principles of PPD-41 as they relate to the energy sector. PPD-41 DOE Update Page 3 of 4 RESOURCES • • • • • • For the text of the PPD-41: https://www.whitehouse.gov/the-press-office/2016/07/26/presidentialpolicy-directive-united-states-cyber-incident PPD-41 Annex: https://www.whitehouse.gov/the-press-office/2016/07/26/annex-presidentialpolicy-directive-united-states-cyber-incident PPD-41 Fact Sheet: https://www.whitehouse.gov/the-press-office/2016/07/26/fact-sheetpresidential-policy-directive-united-states-cyber-incident-1 Cyber Incident Reporting: A Unified Message for Reporting to the Federal Government: https://www.dhs.gov/sites/default/files/publications/Cyber%20Incident%20Reporting%20United %20Message.pdf Statement by Secretary of Homeland Security Jeh Johnson: https://www.dhs.gov/news/2016/07/26/statement-secretary-jeh-c-johnson-regarding-ppd-41cyber-incident-coordination Statement by Federal Bureau of Investigation: https://www.fbi.gov/news/stories/new-us-cybersecurity-policy-solidifies-fbi-as-key-cyber-leader PPD-41 DOE Update Page 4 of 4 Cyber Incident Severity Schema The United States Federal Cybersecurity Centers, in coordination with departments and agencies with a cybersecurity or cyber operations mission, adopted a common schema for describing the severity of cyber incidents affecting the homeland, U.S. capabilities, or U.S. interests. The schema establishes a common framework for evaluating and assessing cyber incidents to ensure that all departments and agencies have a common view of the: • • • • The severity of a given incident; The urgency required for responding to a given incident; The seniority level necessary for coordinating response efforts; and The level of investment required of response efforts. The table below depicts several key elements of the schema. General Definition Level 5 Poses an imminent threat to the Emergency provision of wide-scale critical (Black) infrastructure services, national gov’t stability, or to the lives of U.S. persons. Level 4 Likely to result in a significant impact Severe to public health or safety, national (Red) security, economic security, foreign relations, or civil liberties. Level 3 Likely to result in a demonstrable High impact to public health or safety, (Orange) national security, economic security, foreign relations, civil liberties, or public confidence. Level 2 May impact public health or safety, Medium national security, economic security, (Yellow) foreign relations, civil liberties, or public confidence. Level 1 Unlikely to impact public health or Low safety, national security, economic (Green) security, foreign relations, civil liberties, or public confidence. Level 0 Unsubstantiated or inconsequential Baseline event. (White) Observed Actions Effect Intended Consequence 1 Cause physical consequence Damage computer and networking hardware Presence Corrupt or destroy data Deny availability to a key system or service Engagement Steal sensitive information Commit a financial crime Preparation Nuisance DoS or defacement In addition to characterizing the observed activity, one must consider the scope and scale of the incident when applying the general definitions to arrive at a severity level. 1 OVERVIEW CYBER MUTUAL ASSISTANCE PROGRAM June 2016 The Electricity Subsector Coordinating Council (ESCC) is developing a set of industry initiatives to provide cyber emergency assistance to entities in the electric sector, collectively known as the Cyber Mutual Assistance Program (CMA Program). The first initiative under the CMA Program is the development of a pool of industry experts (Pool) with cyber skills and experience who can provide assistance on a voluntary basis to other participating entities in the event of a disruption of electric service, systems and/or IT infrastructure due to a cyber emergency. Cyber Mutual Assistance Coordinators Every CMA Program participant must designate a Cyber Mutual Assistance Coordinator (Coordinator) who will serve as the single point of contact for all matters related to the Pool. The Coordinator must be a senior level expert with the authority to act on behalf of the participating entity it represents. In addition, a Coordinator must have sufficient cyber security, operating technology and information technology skills and experience, or manage such resources, in order to be able to request, or respond to a request for, a broad range of emergency cyber needs in the context of a potentially complex and evolving cyber emergency. The CMA Program will be governed and supported by a Coordinator Committee comprised of all Coordinators, and an Executive Committee that provides oversight and reports to the ESCC. Participation in the Pool Participation in the Pool is open to all entities that provide or materially support the provision of generation, transmission or distribution electric service. A participating entity’s decision to participate in the Pool, or to respond to any particular request for assistance made within the Pool, is voluntary. There is no cost to participate in the Pool other than the reimbursement of the costs and expenses of an entity furnishing emergency cyber assistance to a requesting entity. In order to participate in the Pool each participating entity must execute a mutual non-disclosure and use of information agreement which will ensure an appropriate level of confidentiality. Assistance An entity in need of assistance may make a direct request to any other participating entity or may make a broader request for emergency cyber assistance to all participating entities. Assistance may include services, personnel and/or equipment. Initially, EEI shall serve as the Pool’s project manager on behalf of the ESCC. Electromagnetic Pulse (EMP) Grid Resiliency: Transmission Vulnerability and Mitigation - Project Update August 23, 2016 To: Electricity Subsector Coordinating Council (ESCC) Members On April 29th of this year, EPRI initiated a comprehensive, three-year research project to address the potential threat of high-altitude electromagnetic pulse (HEMP) to the bulk-power system. The research project was established to provide an unclassified, technical basis for: 1) characterizing the HEMP environment and defining system performance criteria, 2) assessing the impact of HEMP on the reliability of the bulk-power system and its components, 3) developing strategies, options and decision tools for mitigating the impacts of a HEMP attack, and 4) informing members and stakeholders. A progress report was provided to the ESCC membership in June 2016. Research and development (R&D) activities since the June update have primarily been focused in the following areas:      finalizing a detailed research action plan and initiating R&D activities based on the plan; performing internal R&D to improve understanding of high-altitude electromagnetic pulse (HEMP) and its effects on the bulk-power system in order to inform the EPRI R&D process; collaborating with the DOE, DoD and national labs to facilitate the sharing of ideas, best practices and knowledge regarding the likelihood and impact of a potential HEMP attack on the U.S. power grid; performing an analysis of the U.S. power grid to determine the effects of magnetohydrodynamic EMP (MHD-EMP or E3) on bulk-power system reliability; testing of systems and components. Below is a brief summary of activities and accomplishments to date. A detailed research action plan has been developed and approved by EPRI project membership. Efforts are underway to develop scopes, schedules and budgets for the various tasks. Many of the tasks defined in the action plan are currently underway. A report describing the state of knowledge of high-altitude electromagnetic pulse (HEMP) research and its potential impact to the bulk-power system is being finalized. The final report will be a compendium of publically-available information consolidated from over 50 technical reports and papers which describe what is known regarding research, testing, assessment, and mitigation efforts related to highaltitude electromagnetic pulse (HEMP). The report will also include a description of current utility practices regarding the hardening of facilities against a HEMP attack. Research is currently underway to characterize a nominal high-altitude electromagnetic pulse (HEMP) environment for use in bulk-power system vulnerability assessments. Current work is based on publically-available information; however, EPRI is currently evaluating the potential for developing additional threat scenarios with aid from our government partners. These additional threat scenarios Page 1 of 2 would then be used to inform assessments performed in the latter stages of the project. Additionally, work is underway to develop an animation of a notional HEMP threat scenario to illustrate the size, location and accuracy of a potential HEMP attack on the U.S. A study to assess the impact of MHD-EMP (E3) on the Continental U.S. electric grid was initiated in June 2016. The study is evaluating the impacts of a HEMP attack over ten separate target locations in the U.S. and includes both a voltage stability analysis and transformer thermal assessment. The results of the assessment will be used to estimate the likelihood of voltage collapse and estimate the survivability rate of the U.S. transformer fleet should a HEMP attack occur. A nominal MHD-EMP environment (field strength, spatial and temporal characteristics) has been selected, and initial geomagnetically-induced current (GIC) and voltage stability calculations have been performed. Additionally, a time-domain transformer thermal model has been developed and validated against available measurement data. Analysis is continuing with an estimated completion of November 2016. Assessment results are expected to be made available to project members in December 2016 pending a security review. One of the next steps in the project is to begin testing of systems and components to determine their vulnerability to HEMP (E1 and MHD-EMP). EPRI is currently engaging with experts to design and build an EMP test facility as well as develop procedures for performing the necessary tests. The types of equipment and systems (e.g. protective relays, SCADA, etc.) that will be initially tested are also being identified. Additionally, EPRI is engaging with two member utilities to possibly perform a dc injection test of in-service transformers to improve understanding of the physics of transformers subjected to high levels of GIC as well as further validate available transformer magnetic and thermal models. Lastly, executive-level communications are being developed. These include: 1) a short video providing a brief description of HEMP and its potential impact on the bulk-power system, as well as a brief description of the EPRI project, and 2) a listing of frequently asked questions with answers. Questions regarding this update may be directed to the EPRI project manager, Randy Horton. Randy Horton, Ph.D., P.E. Senior Technical Executive Office: 205-671-5099 Cell: 205-515-7303 Email: rhorton@EPRI.com Page 2 of 2 FAST Act 2015 DOE Plan for Strategic Transformer Reserve (Sec. 61004)     Directs DOE, in consultation with the FERC, ESCC, NERC, and users and operators of critical electric infrastructure and military installations to prepare and submit, within one year, a plan to Congress to establish a Strategic Transformer Reserve for the storage of spare large power transformers, emergency substations, and other necessary spare critical electric grid equipment. The act does not give DOE the authority or funding to establish this reserve, but requires DOE to estimate the cost of such a reserve in the plan as well as funding options. Critical electric infrastructure is “a system or asset of the bulk‐power system, whether physical or virtual, the incapacity or destruction of which would negatively affect national security, economic security, public health or safety, or any combination of such matters.” The Strategic Transformer Reserve plan must include: o Appropriate number and type of spare larger power transformers necessary to provide/restore sufficient resiliency to mitigate significant impacts to the grid from physical attack, cyber attack, EMP attack, GMD, severe weather, or seismic events. o Other critical electric grid equipment necessary to provide or restore sufficient resiliency  Degree to which utility sector actions or initiatives provide appropriate spare large power transformers and other critical equipment o Includes individual utility ownership of spare equipment, joint ownership, sharing agreements, or other spare equipment reserves/arrangements o Potential locations, feasibility, and appropriate number of strategic storage locations o Necessary degree of flexibility of spare large power transformers to be included in the reserve to conform to different substation configurations o Estimate of the direct cost of the Strategic Transformer Reserve o Funding options available to establish, stock, manage, and maintain the Strategic Transformer Reserve 1    o Ease and speed of transportation, installation, and energization of spare larger power transformers to be included in the reserve o Eligibility criteria and process for withdrawal of equipment from the reserve o Possible fees to be paid by users that withdraw equipment from the reserve as well as owners and operators of large power transformers and substations that are critical electric infrastructure or serve defense and military installations to cover operating costs of the reserve o Large power transformer supply chain o Potential reliability, costs, operational benefits of including emergency mobile substations in the reserve o Other considerations for designing, constructing, stocking, funding, and managing the reserve. 2    Friday, August 12, 2016 Directory Listing Reliability EAC Page: 1 Oberski, Louis R. Chair Managing Dir, NERC Compliance and Policy Dominion Resources Services, Inc. 701 E Cary St Richmond, VA 23219 Phone: (804)771-3931 Email: lou.oberski@dom.com Basler, Dwayne Director, Transmission Engineering Eversource Energy PO Box 270 Hartford, CT 06141-0270 Phone: (860)665-6796 Fax: (860)665-6878 Email: basledm@nu.com Mastin, Judy L. EEI Committee Coordinator Manager, Meetings & Budget Edison Electric Institute 701 Pennsylvania Ave, NW Washington, DC 20004-2696 Phone: (202) 508-5402 Fax: (202) 508-5445 Email: jmastin@eei.org Bennett, Danielle Associate General Counsel Duke Energy 410 S Wilmington St Raleigh, NC 27601-1748 Phone: (919)546-5941 Email: dani.bennett@duke-energy.com Mail Stop: PEB 20 Seader, Melanie EEI Committee Representative Director, Reliability Policy Edison Electric Institute 701 Pennsylvania Ave, NW Washington, DC 20004-2696 Phone: (202)508-5063 Fax: (202)508-5445 Email: mseader@eei.org Borkowski, Maureen A. Chairman and President Ameren Transmission Company One Ameren Plaza 1901 Chouteau Ave St. Louis, MO 63103-3085 Phone: (314)554-2050 Fax: (314)554-6454 Email: mborkowski@ameren.com Ahmed, Mohammed Manager, East Transmission Planning American Electric Power 700 Morrison Rd Gahanna, OH 43230-6642 Phone: (614)552-1669 Fax: (614)883-7234 Email: mahmed@aep.com Breene, Thomas Manager - FERC/NERC Compliance Wisconsin Public Service Corporation 700 N Adams St Green Bay, WI 54301-5173 Phone: (920)433-1045 Email: tlbreene@wisconsinpublicservice.com Appelbaum, Jonathan Director, NERC Compliance The United Illuminating Company 180 Marsh Hill Rd Orange, CT 06477 Phone: 203-499-2645 Email: Jonathan.Appelbaum@uinet.com Brockhan, John D. Director, Policy and Compliance CenterPoint Energy PO Box 1700 Houston, TX 77251-1700 Phone: (713)207-2790 Fax: (713)207-4677 Email: john.brockhan@centerpointenergy.com Friday, August 12, 2016 Directory Listing Reliability EAC Page: 2 Case, James S. Director, Operations Engineering Entergy Services, Inc. PO Box 1640 Jackson, MS 39215-1640 Phone: (601)985-2345 Fax: (202)530-7350 Email: jcase@entergy.com Goldsmith, Kenneth A. TIS Compliance Manager Alliant Energy Corporation 200 1st St., SE Cedar Rapids, IA 52401-0000 Phone: (319)786-4167 Fax: (319)786-4567 Email: kengoldsmith@alliantenergy.com Chou, Yee NERC Compliance Manager American Electric Power 1 Riverside Plaza Columbus, OH 43215 Phone: (614)716-3877 Email: ycchou@aep.com Gust, Jeffery J. VP, Compliance & Planning MidAmerican Energy Company 4299 NW Urbandale Dr Urbandale, IA 50322-7298 Phone: 515-252-6429 Email: jjgust@midamerican.com Coco, Gregory A. VP, Transmission and Distribution Operations Cleco Power PO Box 5000 Pineville, LA 71361-5000 Phone: (318)484-7520 Fax: (318)484-7394 Email: greg.coco@cleco.com Hampton, Brenda Director NERC & TRE Affairs Energy Future Holdings Corporation 1005 Congress Ave Austin, TX 78701 Phone: (314)809-7065 Email: brenda.hampton@luminant.com Mail Stop: Suite 750 Flandermeyer, Jennifer S. Sr. Manager, Reliability Strategy Kansas City Power & Light Company 1200 Main St Kansas City, MO 64105-2122 Phone: (816)701-7851 Email: jennifer.flandermeyer@kcpl.com Hargreaves, Roger Director, Transmission System Operations Xcel Energy 414 Nicollet Mall Minneapolis, MN 55401 Phone: (612)751-2319 Email: roger.d.hargreaves@xcelenergy.com Fulton, Donna J. Director, Federal Regulatory Policy Eversource Energy 901 F Street, NW, Suite 602 Washington, DC 20004-0000 Phone: (202)508-0902 Fax: (202)347-7064 Email: donna.fulton@eversource.com Hitti, Nabil E. Director, Reliability Compliance National Grid 40 Sylvan Rd Waltham, MA 02451 Phone: (508)389-2178 Email: nabil.hitti@nationalgrid.com Friday, August 12, 2016 Directory Listing Reliability EAC Page: 3 Hohlbaugh, Doug Manager, Reliability Compliance FirstEnergy Corp. 76 South Main St Akron, OH 44308-1812 Phone: (330)384-4698 Fax: (330)384-5349 Email: hohlbaughdg@firstenergycorp.com Lucas, John E. GM, Transmission Policy & Services Southern Company 600 N 18th St Birmingham, AL 35203 Phone: (205)257-7200 Fax: (205)257-6663 Email: jelucas@southernco.com Ivey, Susan VP, Transmission Operations & Planning Exelon Corporation 10 S Dearborn St Chicago, IL 60603-0000 Phone: (215)841-4706 Email: susan.ivey@exeloncorp.com Mattiuz, Robert Director, FERC Compliance FirstEnergy Corp. 76 South Main St Akron, OH 44308-1812 Phone: (330)384-2407 Email: rmattiu@firstenergycorp.com Johnson, Douglas Manager of Operational Compliance American Transmission Company PO Box 47 Waukesha, WI 53187-0047 Phone: (262)506-6863 Fax: (262)506-6713 Email: dfjohnson@atcllc.com McCulla, Mark VP, Transmission Operations Entergy Corporation 639 Loyola Ave New Orleans, LA 70113-3125 Phone: (504)576-6123 Email: mmccul1@entergy.com Jones, Juan Director, System Operations Entergy Corporation 1340 Echelon Parkway Jackson, MS 39213-0000 Phone: (601)713-7037 Fax: (601)713-7007 Email: jjone18@entergy.com Mail Stop: M-DCJ-1D McKinnon, William P. Mgr., Interconnections & Svcs Eversource Energy 107 Selden St Berlin, CT 06037-1616 Phone: (860)665-2392 Fax: (860)665-2609 Email: mckinwp@nu.com Kelliher, Joseph T. Executive Vice President, Federal Regulatory Affairs NextEra Energy 801 Pennsylvania Ave NW Suite 220 Washington, DC 20004-0000 Phone: (202)349-3342 Fax: (202)347-7076 Email: joe.kelliher@nee.com Moltane, Mike Manager, Operations Policy ITC Holdings Corporation 27175 Energy Way Novi, MI 48377 Phone: (248)946-3093 Email: mmoltane@itctransco.com Friday, August 12, 2016 Directory Listing Reliability EAC Page: 4 Moore, Scott P. VP, Transmission Engineering & Project Services American Electric Power 700 Morrison Rd Gahanna, OH 43230-6642 Phone: (614)552-2100 Fax: 866-814-2069 Email: spmoore@aep.com Ness, Thad Director, Compliance Monitoring and Policy Xcel Energy 414 Nicollet Mall Minneapolis, MN 55401 Phone: (612)330-2854 Email: thad.k.ness@xcelenergy.com Mail Stop: 8th Floor Mueller, Jeffrey Manager - PSE&G NERC Standards and Compliance Public Service Electric & Gas Company 80 Park Plaza Newark, NJ 07102-4194 Phone: (973)430-8447 Fax: (973)623-3261 Email: jeffrey.mueller@pseg.com Painter, Ralph Manager - FERC Compliance Tampa Electric 702 N Franklin St Tampa, FL 33602-4418 Phone: (813)228-4196 Email: rdpainter@tecoenergy.com Murphy, Brian J. Transmission Business Manager Florida Power & Light Company 4200 W Flagler St Miami, FL 33134-1606 Phone: (305)442-5132 Email: brian.j.murphy@fpl.com Peeler, V. Nelson VP, Transmission System Operations Duke Energy 526 S Church St Charlotte, NC 28202-1802 Phone: (704)382-3851 Fax: (980)373-5904 Email: Nelson.Peeler@duke-energy.com Mail Stop: Mail Code - EC3ZJ Myford, Raymond Director, Federal Affairs & Compliance Arizona Public Service Company 400 N 5th St Phoenix, AZ 85004 Phone: (602)250-2790 Email: raymond.myford@aps.com Mail Stop: 8995 Pespisa, John Director, NERC Compliance Program Southern California Edison 2244 Walnut Grove Ave Rosemead, CA 91770 Phone: (626)302-3308 Email: john.pespisa@sce.com Naumann, Steven T. VP, Transmission and NERC Policy Exelon Corporation 10 S Dearborn St Chicago, IL 60603-0000 Phone: (312)394-2807 Fax: (312)394-8993 Email: steven.naumann@exeloncorp.com Pieper, Gregory L. Consulting Engineer Xcel Energy 414 Nicollet Mall Minneapolis, MN 55401 Phone: (612)330-2922 Fax: (612)337-2296 Email: gregory.l.pieper@xcelenergy.com Friday, August 12, 2016 Directory Listing Reliability EAC Page: 5 Powell, Margaret NERC Compliance Management Exelon Corporation 100 Constellation Way Baltimore, MD 21202-0000 Phone: 410-470-3382 Email: Margaret.Powell@constellation.com Slocum, Brian VP, Operations ITC Holdings Corporation 27175 Energy Way Novi, MI 48377 Phone: (248)946-3231 Fax: (248)946-3229 Email: bslocum@itctransco.com Rhea, John Compliance Officer Oklahoma Gas & Electric Company 321 North Harvey Ave Oklahoma City, OK 73102-3405 Phone: (405)397-8499 Email: rheajd@oge.com Mail Stop: M/C1214 Sterling, Jennifer Director, NERC Compliance Program Exelon Corporation Two Lincoln Centre Oakbrook Terrace, IL 60181-0000 Phone: (630)437-2764 Email: jennifer.sterling@exeloncorp.com Schiada, David Principal Manager, Regulatory Affairs & Compliance Southern California Edison 3 Innovation Way Pomona, CA 91768 Phone: (909)274-3627 Fax: (909)274-3304 Email: david.schiada@sce.com Thorne, David Manager, Operations Eng Planning & Analysis Pepco Holdings PO Box 9239 Newark, DE 19714-9239 Scott, Eric Director, Reliability Standards Compliance Ameren Services One Ameren Plz 1901 Chouteau Ave St Louis, MO 63103-3085 Phone: (314)554-2733 Email: escott3@ameren.com Vaughan, Michael A. VP, T&D Asset Management Entergy Corporation 308 E Pearl St Jackson, MS 39201-3496 Phone: (601)985-2800 Fax: (601)985-2923 Email: mvaugha@entergy.com Sellers, Michael Transmission Policy Manager Southern Company 600 N 18th St Birmingham, AL 35203 Phone: (205)257-7531 Email: mcseller@southernco.com Mail Stop: Bin 13N-8220 Wilson, Christopher M. Engineer, SR Southern Company 600 N 18th St Birmingham, AL 35203 Phone: (205)257-4241 Fax: (205)257-6654 Email: cmwilson@southernco.com Friday, August 12, 2016 Directory Listing Reliability EAC Xanthakos, Pandelis VP, Electric Transmission South Carolina Electric & Gas Company 220 Operation Way Cayce, SC 29033-0000 Phone: (803)217-1821 Email: pxanthakos@scana.com Mail Stop: J36 Page: 6 20160721-3036 FERC PDF (Unofficial) 07/21/2016 July 21, 2016 News Media Contact Mary O’Driscoll 202-502-8680 Docket Nos. RM15-14-002 and RM16-18-000 Item Nos. E-8 and E-10 FERC Directs Development of Standards for Supply Chain Cyber Controls The Federal Energy Regulatory Commission (FERC) acted today to improve the cyber security of the bulk electric system by directing the North American Electric Reliability Corporation (NERC) to develop a new supply chain risk management standard that addresses risks to information systems and related bulk electric system assets. In today’s rule, FERC directed NERC to develop a forward-looking, objective-based Critical Infrastructure Protection (CIP) Reliability Standard that requires each affected entity to develop and implement a plan that includes security controls for supply chain management for industrial control system hardware, software, and services associated with bulk electric system operations. The new or modified Reliability Standard should address software integrity and authenticity; vendor remote access; information system planning; and vendor risk management and procurement controls. There is no requirement for any specific controls, nor does FERC require any “one-size-fits-all” requirements. The new or modified Reliability Standard should instead require responsible entities to develop a plan to meet the four objectives while providing flexibility to responsible entities as to how to meet those objectives. NERC is required to submit the new or modified Reliability Standard within one year of the effective date of the final rule. The final rule will take effect 60 days after publication in the Federal Register. Also today, FERC issued a Notice of Inquiry (NOI) into modifying CIP standards regarding the protection of control centers that are used to monitor and control the bulk electric system in real-time. Cyber systems are used extensively to operate and maintain interconnected transmission networks. The 2015 cyberattack on the electric grid in Ukraine is an example of how cyber systems used to operate and maintain interconnected networks more efficiently can have the unintended effect of creating cyber vulnerabilities. In this case, the Commission is seeking comment on possible modifications, and any potential impacts they may have on the operation of the Bulk-Power System, to address separation between the internet and the cyber systems in control centers that perform transmission operator functions, and computer administration practices that prevent unauthorized programs from running, known as “application whitelisting,” for cyber systems in control centers. Comments on the NOI are due 60 days after publication in the Federal Register. R-16-21 (30) Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Colette D. Honorable Commissioner FERC Commissioner Colette D. Honorable was nominated to the Federal Energy Regulatory Commission by President Barack Obama in August 2014, and unanimously confirmed by the U.S. Senate in December 2014 for a term that expires in June 2017. An attorney, Commissioner Honorable came to FERC from the Arkansas Public Service Commission, where she served since October 2007, and led as Chairman from January 2011-January 2015. As Chairman of the PSC, Honorable oversaw an agency with jurisdiction over 450 utilities and approximate annual revenues of $5 billion. She was charged with ensuring safe, reliable and affordable retail electric service. During her tenure, Arkansas led the South and Southeast in comprehensive energy efficiency programs, and electric rates were consistently among the lowest in the nation. Honorable is past president of the National Association of Regulatory Utility Commissioners, where she focused on pipeline safety, reliability, resilience, fuel diversity, and workforce development during her one-year term. She has testified before Congress on multiple occasions on a range of energy issues. Prior to joining the Arkansas PSC, Honorable served as chief of staff to then Arkansas Attorney General Mike Beebe and as a member of the governor’s cabinet as Executive Director of the Arkansas Workforce Investment Board. Her previous employment includes service as a consumer protection and civil litigation attorney, and as a senior assistant attorney general in Medicaid fraud before serving as an adjunct professor at the University of Arkansas at Little Rock School of Law. Honorable is an Ambassador for the Clean Energy Education and Empowerment Initiative, an effort co-led by the U.S. Department of Energy and the MIT Energy Initiative, formed under the auspices of the International Clean Energy Ministerial. A native of Arkansas, Honorable is a graduate of the University of Memphis and received a Juris Doctor from the University of Arkansas at Little Rock School of Law. Fall Board and Chief Executives Meeting Speaker Biography September 6-8, 2016 The Broadmoor  Colorado Springs, CO Josh Linkner Technology Entrepreneur Entrepreneur & CEO. Josh was the founder and CEO of four successful technology companies over the last 24 years. Josh is Founder and former CEO of ePrize, the world’s largest interactive promotion agency that provides digital marketing services for 74 of the top 100 brands. Prior to ePrize, he was founder/CEO of three other successful technology companies. Each of his four startups enjoyed successful exits with a combined value of over $200 million. He’s been involved in the launch and growth of over 100 businesses, raised over $150 million of venture capital, employed thousands of people and fought through the dot-com crash, 9/11 and the 2008 financial meltdown. His extraordinary business accomplishments led him to be honored twice as the Ernst & Young “Entrepreneur of the Year” and as a President Barack Obama “Champion of Change” Award recipient. Author & Thought Leader. Josh’s first book, Disciplined Dreaming: A Proven System to Drive Breakthrough Creativity was a New York Times bestseller and named one of 2011’s top ten business titles by Amazon.com. It is now available in 13 languages. His second book, The Road to Reinvention: How to Drive Disruption and Accelerate Transformation, was also named a NY Times bestseller in its first week on bookshelves and was named the 2014 Best Leadership/Management Book by 800-CEO-READ. He is a regular columnist for Forbes, The Detroit Free Press, and Inc. Magazine. His work has been featured consistently in the media, including The Wall Street Journal, Harvard Business Review, USA Today, and The New York Times. Venture Capital Investor. As Founding Partner of Detroit Venture Partners, Josh remains at the cutting edge of technology and entrepreneurship. He oversees a $60 million venture fund investing in tech startups with the goal of revitalizing his hometown of Detroit, Michigan. Keynote Speaker. Consistently ranked one of the top speakers on innovation, creativity, and reinvention, Josh brings an artistic flair while delivering powerful, inspiring, and practical keynotes and workshops. His presentations are customized for every event, ensuring a highly relevant and valuable outcome. Through his talks, Josh has inspired over 100,000 people across four continents. Jazz Musician. Beginning at age eight, Josh became a dedicated musician. He began performing professionally at age 13, and later attended the prestigious Berklee College of Music. Still a professional-level jazz guitarist, Josh often injects live musical performances into his keynote presentations in a unique and memorable fashion. He brings a jazz musician’s commitment to creativity and improvisation to the business world, offering a distinctive perspective to growth and leadership. CEO Meeting Schedule 2016 January 5-7 Board Chief Executive Meetings The Fairmont Scottsdale Princess Scottsdale, AZ June 12-15 Annual Convention Board Meeting Sheraton Grand Chicago Chicago, IL November 6-9 EEI Financial Conference JW Marriott Desert Ridge Phoenix, AZ March 15-17 Board 8: Chief Executive Meetings Mandarin Oriental Washington, DC September 6-8 Board Chief Executive Meetings The BroadmOOr Colorado Springs, CO 2017 January 10-12 Board Chief Executive Meetings The Breakers Palm Beach, FL June 11-14 Annual Convention Board Meeting Boston Marriott Copley Place Boston, MA November 5-8 Financial Conference The Walt Disney World Dolphin Lake Buena Vista, FL *March 1 3-1 5 Board Chief Executive Meetings Mandarin Oriental Washington, DC ?Date/Pattern change Monday to Wednesday September 5-7 Board Chief Executive Meetings The Broadmoor Colorado Springs, CO 2018 January 9-11 Board Chief Executive Meetings The Fairmont Scottsdale Princess Scottsdale, AZ September 4-6 Board Chief Executive Meetings The Broadmoor Colorado Springs, CO *June 4-7 Annual Convention Board Meeting Manchester Grand Hyatt San Diego, CA *Paft?em Change Monday-Thursday November 11-14 EEI Financial Conference Hilton San Francisco Union Square San Francisco, CA 2019 January 8-10 June 9?12 Board 8. Chief Executive Meetings Annual Convention Board Meeting The Breakers Philadelphia Marriott Downtown Palm Beach, FL Philadelphia, PA September 3-5 Board Chief Executive Meetings The Broadmoor Colorado Springs, CO The Edison Electric Institute (EEI) is the association that represents all U.S. investor-owned electric companies. Our members provide electricity for 220 million Americans, operate in all 50 states and the District of Columbia, and directly and indirectly employ more than one million workers. Safe, reliable, affordable, and clean energy powers the economy and enhances the lives of all Americans. EEI has dozens of international electric companies as International Members, and hundreds of industry suppliers and related organizations as Associate Members. 

 Organized in 1933, EEI provides public policy leadership, strategic business intelligence, and essential conferences and forums. For more information, visit our Web site at www.eei.org. Edison Electric Institute 701 Pennsylvania Avenue, NW Washington, DC 20004-2696 202-508-5000 www.eei.org